April 29, 2009

Bits Bucket For April 29, 2009

Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum. And see the The American Visionaries series from Schwarzfilm.




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391 Comments »

Comment by aNYCdj
2009-04-29 04:38:57

No comment.. I have ran out out words to enlighten my fellow humans

Comment by edgewaterjohn
2009-04-29 05:20:55

Just spin us some Zydeco then.

Comment by DinOR
2009-04-29 07:09:47

Ils Sont Partis!

 
Comment by Cowtown
2009-04-29 10:14:00

Laissez les bon temps rouler!

Comment by phillygal
2009-04-29 11:10:36

Les jeux sont faits!

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Comment by Jim A.
2009-04-29 12:34:00

Ça plane pour moi!

–’Course that’s hardly Zydeco….

 
 
 
 
Comment by pressboardbox
2009-04-29 05:33:52

I too have absolutely nothing to contribute.

 
Comment by rainmayun
2009-04-29 06:34:03

Surely you have something to say about the annualized 6.something% declinde in US GDP for the first quarter, which exceeded analyst expectations of 5%?

Comment by cobaltblue
2009-04-29 07:28:34

Why yes, of course, I have my usual inflammatory comments which will cause the usual castigation:

It seems that the PPT-Fed-Megabank Boyz
are determined to squeeze every short out of the market on the worst economic news in 80 years.

They may succeed. The game plan of printing our way to long term prosperity will not.

Comment by Elanor
2009-04-29 09:53:07

Nothing inflammatory about that remark. Just the facts, man. (a little ‘Dragnet’ homage) ;)

Maybe it’s time to give up on SRS and take my losses. Nothing seems to budge its price from its current low. Neither price drops nor a glut of homes for sale can counteract the power of Governments Sachs on the market.

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Comment by mathguy
2009-04-29 10:55:52

If it’s super low now (looks like 1/10th of it’s high of 250) doesn’t that mean it’s almost time to buy? What are the fundamentals behind SRS that make you think it is good or bad?

 
 
 
Comment by BanteringBear
2009-04-29 10:31:25

Surely you have something to say about the annualized 6.something% declinde in US GDP for the first quarter, which exceeded analyst expectations of 5%?

Which is “good news”. Everything is being spun as positive these days. The DOW is rocketing up right now, close to a gain of 200 on the day, based on nothing. All I hear is talk of things “bottoming”, “positive signs”, “glimmers of hope”, and blah, blah, blah. Meanwhile, in the real world, things are absolutely atrocious. The disconnect between the MSM and reality is stunning.

Comment by james
2009-04-29 17:44:07

The dow is probably reacting to the FOMC saying they were going to buy 1.5 Trillion more of GSE debt in their quantative easing plan. So, investors are probably thinking this will result in gains for financials.

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Comment by SanFranciscoBayAreaGal
2009-04-29 11:50:46

How about POWER TO THE PEOPLE ;)

Comment by CA renter
2009-04-30 03:08:46

:)

 
 
 
Comment by wmbz
2009-04-29 04:54:48

Patching the Foreclosure Plan…
Treasury broadens the President’s home-mortgage plan to address second liens. But Congress may need to act to protect banks from lawsuits
By Theo Francis
Francis is a correspondent in BusinessWeek’s Washington bureau.

The U.S. Treasury Dept. broadened the Obama Administration’s foreclosure-prevention program on Apr. 28 in a bid to resolve a persistent obstacle to cleaning up problem mortgages. But some financial officials say the fledgling program’s success still hinges on controversial legislation pending in Congress, which is also expected to take up another contentious bill that would allow bankruptcy judges to reduce the principal owed on a home.

Although the Administration announced an ambitious housing-assistance program in February and released detailed parameters in early March, progress has been slowed by an obstacle all too familiar when it comes to modifying mortgages: second liens.

Typically the result of “piggyback” loans that let homeowners buy a house with no money down, or lines of credit, second liens can complicate mortgage modification and leave homeowners more likely to default again, even if their primary loan is made more affordable. Treasury estimates about half of homeowners at risk of default carry second liens.
Cash Incentives

On Tuesday, Treasury said it would use some of the $75 billion already allocated for housing programs to pay cash incentives to mortgage servicers and investors to reduce homeowners’ payments on second mortgages when the primary mortgage is being modified under the government’s program. Interest rates for second liens could be pushed as low as 1%.

Although the program is voluntary, Administration and industry officials said the big banks that handle about 80% of first mortgages and 50% of second liens are willing to sign on once contracts are drawn up. Once on board, mortgage servicers would have to modify any loan that met the government’s criteria. Several big banks are already participating in the program announced in March to modify primary mortgages.

But big financial companies say one element is missing to ensure the program’s success: protection from lawsuits against them by investors unhappy with how loans are modified.

Congress is considering legislation that would give mortgage servicers such a “safe harbor” under certain conditions. Many mortgages have been sliced into pieces and sold as securities to investors, who have different claims on the stream of mortgage payments from homeowners. Servicers say they are worried that they will be sued by investors who lose value because a mortgage’s interest rate has been lowered, or its term extended, or interest has been waived on some portion of its principal—all tools used under the Administration’s foreclosure program.

Comment by palmetto
2009-04-29 05:16:00

I don’t understand any of this crap. As far as I am concerned, it’s all a delusion. Maybe they’ll trot out one success story. That’s it.

Presto, changeo, now you see it, now you don’t.

And there’s another element to this. People can’t even get through to banks and financial institutions. Why? Because all the grunts are cut back and laid off.

None of this is rational.

Comment by edgewaterjohn
2009-04-29 05:25:24

They’re still flailing with yesterday’s debts. There’s no real growth or innovation in these plans.

Comment by combotechie
2009-04-29 05:37:42

“They’re still flailing with yesterday’s debts.”

And they are removing any trust in the system that encourages fresh money to be invested.

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Comment by Kirisdad
2009-04-29 06:00:57

+1 combo.

 
Comment by Blue Skye
2009-04-29 06:34:40

No end in sight for the downward price spiral.

 
Comment by Muir
2009-04-29 08:54:21

“And they are removing any trust in the system that encourages fresh money to be invested.”

Hence cash is NOT king.

 
Comment by Blue Skye
2009-04-29 09:11:34

Having the debt machine collapse for lack of capital means

Cash is King!

 
Comment by Julius
2009-04-29 13:53:52

Oh wait, haven’t you heard? Housing prices are “within shouting distance from the bottom”:

“Ranieri Says Housing Is Shouting Distance From Bottom (Update1)

By Eric Martin

April 29 (Bloomberg) — Lewis Ranieri, a mortgage-bond pioneer and former Salomon Brothers vice chairman, said the slump in U.S. home prices is almost over.

“I’m actually very enthusiastic about housing, and I haven’t said that in five years,” said Ranieri, who spoke on a panel at the Milken Institute Global Conference in Beverly Hills, California. “We’re within shouting distance of a bottom.”

Ranieri, 62, helped turn New York-based Salomon Brothers into Wall Street’s most-profitable firm in the 1980s by being one of the first to package mortgages and sell them as securities. He is now chairman of Hyperion Partners LP, a New York investment firm.

He founded Houston-based Franklin Bank Corp., which filed for bankruptcy in November. While Franklin avoided the subprime mortgage market, his firm was burned by loans to builders in California, Arizona, Florida and Michigan, where foreclosures are among the highest in the U.S.

The housing market will bottom before the economy improves, Ranieri said. The decline in home prices has made them more affordable for middle-class Americans, he added. The Standard & Poor’s/Case-Shiller Composite-20 Home Price Index has plunged 31 percent since July 2006.

“We have this amazing basket of inventory to play with,” he said. “Think of what we’re doing in terms of enfranchising people who could never have gotten into this house.”

None of this makes sense unless we redefine “shouting distance” as “several light years”.

 
Comment by neuromance
2009-04-29 18:16:49

“I’m actually very enthusiastic about housing, and I haven’t said that in five years,” said Ranieri, who spoke on a panel at the Milken Institute Global Conference in Beverly Hills, California. “We’re within shouting distance of a bottom.”

Five years?

These clowns weren’t even admitting to any kind of bubble (and I wonder if the NAR even does today) until very, very recently - like fall 2008, when the credit markets bogged down. And then very tepidly.

The engineers and cheerleaders of this crisis were deriding those of us questioning the unprecedented home price run-up as late as last year.

Five years this fellow hasn’t been bullish on housing? Bull—t.

 
Comment by CA renter
2009-04-30 03:12:23

“I’m actually very enthusiastic about housing, and I haven’t said that in five years,” said Ranieri, who spoke on a panel at the Milken Institute Global Conference in Beverly Hills, California. “We’re within shouting distance of a bottom.”
———————-

Where we live, five years ago was pretty darn near the peak. So…he’s saying that he was “enthusiastic” about housing during the hyperbolic rise at the peak.

Sounds like a genius to me…

 
 
Comment by Jim A.
2009-04-29 05:43:50

Well yesterday’s debts ARE today’s problem. Few in the banking or finance industry have any inclination to truly recognize just how much bad debt is out there. So far the response has mostly been to keep kicking the can down the road and hope that times get better. Which is to say treating this like a liquidity problem and not a balance sheet problem. Even the government bailouts are predicated upon the basis that SOMEDAY these toxic assets will return to something approximating par value. The very IDEA of bank bailouts is based upon the notion that current valuations are a temporary blip, and it is cheaper lend money to current banks and get them past this bad patch, rather than letting the old ones fail and creating new banks.

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Comment by packman
2009-04-29 06:04:17

Nail on the head, especially the comment about treating it as a liquidity problem and not a balance sheet problem.

 
Comment by exeter
2009-04-29 06:06:55

Eloquently stated Jim A. This “return to sanity” has multiple definitions, depending on who is discussing it.

 
Comment by Juno Moneta
2009-04-29 06:38:09

The yes, but answer….
Yesterdays debts are always tomorrows problems…Just like my ole’ saying;

“”"You can always put off till tomorrow what you should have done today….”"”

In time, all problems are resolved, but not necessarily to your liking

 
Comment by Jim A.
2009-04-29 07:05:54

Of course when your tools are a dent hammer and bondo, you really don’t want to admit that the frame is bent.

 
Comment by Prime_Is_Contained
2009-04-29 08:39:07

“In time, all problems are resolved, but not necessarily to your liking.”

Awesome line!

A similar one that I like, which sometimes helps me keep things in perspective is: “In 100 years, who will care?”

Actually, in 100 years, we’ll probably be in the throes of another debt-bubble-induced depression. Humans seem to take about three generations to re-learn the lessons of the past by repeating the same mistakes.

 
Comment by patient renter
2009-04-29 09:31:57

Of course when your tools are a dent hammer and bondo, you really don’t want to admit that the frame is bent.

Well put.

 
 
Comment by scdave
2009-04-29 08:13:23

+2 combo

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Comment by Muir
2009-04-29 09:05:22

+1 for concise analysis: “And they are removing any trust in the system that encourages fresh money to be invested.”

-1 because the only logical conclusion is that cash is NOT king.

 
Comment by scdave
2009-04-29 11:28:16

cash is NOT kin ??

Tell AIG that…Without the government “Cash” they were toast…Nobody else would give them that “Cash” because the “Cash” was to valuable to take that kind of risk…Also, look at T-rates…If “Cash” was not a valuable asset the rates would be much, much higher…Investors are asking the USA to hold their “Cash” for little return as a preservation play…I’m with combo…

 
Comment by Muir
2009-04-29 12:37:23

I’m hedged either way.

 
 
 
Comment by pressboardbox
2009-04-29 05:39:20

I just can’t make any sense of all the govt intervention either. If the fed can print money at will and they have already said that they are going to then why does anybody have to pay for anything anymore? Just put it on the fed’s tab.

Comment by darthrealtor
2009-04-29 06:15:10

Money for nothing……checks for free….. (apologies to Knopfler)

“$250 government stimulus checks going to 50 million retirees in May”

http://www.startribune.com/nation/43958582.html?elr=KArks:DCiUMEaPc:UiacyKUUr

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Comment by exeter
2009-04-29 06:18:56

I got an excess $600 from the Feds for 2008 tax return. I still haven’t figured out why and I’m not depositing the check until I find out. Exactly $600.

 
Comment by Bob in Vegas
2009-04-29 06:51:14

If you didn’t get a check last summer, it’s probably the $600 rebate from 2008.

 
Comment by John
2009-04-29 06:51:50

If you didn’t originally qualify for the $600 rebate based on your 2007 return you could still qualify based on your 2008 return. If you didn’t receive a rebate check in May 2008 and the AGI on your 2008 return went below $75k single or $150k married you became eligible for the rebate.

 
Comment by exeter
2009-04-29 06:55:12

I didn’t get it in 08 for 07 and I’m pretty sure our AGI was below 150k for 07. It seems I should have gotten it last year then?

 
Comment by Blue Skye
2009-04-29 06:59:57

The same thing happened to my son. Not qualified in 2007 so he got the $600 when he filed 2008.

 
Comment by Bill in Carolina
2009-04-29 07:08:23

Exeter, our expected small tax refund was also inflated by $600 and I still can’t figure out why. Either I seriously misunderstood the 1040 instructions on claiming the credit or the IRS screwed up. As retirees, we got a “stimulus” payment last year.

 
Comment by exeter
2009-04-29 07:14:49

I do my own taxes and reviewed my return 3x and found no error. I’m inclined to believe that it’s not mine and will have to be returned given the heavy handed nature of the IRS.

 
Comment by bluprint
2009-04-29 07:37:56

I would just put it in the bank. If they want it back, they’ll call. I imagine you will be able to “afford” to pay it back in 6 mos, no?

We’re talking about 600 bucks here, its not like its thousands. Check has your name on it. If you didn’t get a $600 gift last year then its reasonable to think you got it now…

Just my opinion.

 
Comment by cougar91
2009-04-29 08:49:30

Yeah, like bluprint said, just deposit it. If the IRS wants it back they will tell you. As for me, I am never eligible for tax break or refund due to my single status and high AGIs. I just get to pay for stuff. :-(

 
Comment by exeter
2009-04-29 08:50:46

IRS guidance is as follows;

“If you recieve a payment in excess of what you’re owed, DO NOT CASH CHECK”

$600, 6000 or 60000 isn’t gonna make or break me but the IRS can.

 
Comment by patient renter
2009-04-29 09:33:50

I’m with the others. If they want it back, they’ll ask and you’ll give it to them. They won’t break you unless you say no.

 
Comment by bluprint
2009-04-29 09:39:32

Yeah, but I’m saying you have good reason to believe it’s legit (the $600 handout last year).

 
Comment by John
2009-04-29 09:54:14

Check Line 70 of your 1040 then go to the website below to verify the rebate amount you actually recieved last year. See if the two match.

https://sa2.www4.irs.gov/irfof/IRServlet?app=IRACTC&selectLanguage=en

Your tax software program probably entered an amount on that line by default that did not actually match the rebate your received. It is likely that the IRS caught the error and issued you the refund.

 
 
Comment by Blue Skye
2009-04-29 06:15:25

Printing your way out of debt is one tool.

Saying you are going to do something is another tool.

I’ll jump! I mean it! I really really mean it!

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Comment by Don't Know Nothin About Buyin No House
2009-04-29 11:07:28

Just thinking the same Palmetto. Government has put banks in the driver’s seat to sort through the mess and disposition as they see fit. Banks have no incentive, staffing levels to aggressively resolve anything, so they don’t.

For people with troubled loans attempting to work with their bank for resolution, it is no doubt a special private H*ll. What people go through with these banks is likely nowhere near compensation for any breaks they may get. These are the sorts of experiences that are life changing and leave people with a lasting PTSD that screw up the rest of their lives. We may say “serves them right”, but my hope is people should realize it is not worth it and simply walk, take bad credit hits and move on. Alternative is a mental disorder that will eventually send them to the looney bin and cost us taxpayers even more long term.

 
 
Comment by KJ
2009-04-29 05:45:13

I thought Sir Obama had all this figured out in the first 100 days. What gives?

Comment by patient renter
2009-04-29 09:36:42

The financial oligarchy sent him a reminder note.

 
 
Comment by Al
2009-04-29 05:58:51

So they design a plan to assist those that were only somewhat irresponsible, and find out that almost no one applies. Only one solution. Make the plan more irresponsible! Nice.

Comment by NoSingleOne
2009-04-29 07:25:46

I had an “encounter” with the week-old HARP (Obama’s Home Affordability Refinance Program) yesterday when I was looking at refinancing my house. The broker told me that to her knowledge I am the first client at Wells Fargo Alaska who qualifies.

She’s still not sure what criteria they used but it isn’t an income requirement since I’m not considered “at risk” (I put 20% down when I bought 6 mos ago, have a 21% DTI ratio and have been overpaying my balance so I can knock down the principal and pay off the loan in 13-15 years on my current pmt schedule).

In a nutshell, here are the requirements that I know of:

. No minimum credit score required
. Primary residence, second homes and investment properties included
. No more than 1 X 30 days late on mortgage in the past 12 months
. Refinances up to 105% LTV
. Stated income and stated assets

They estimate “40% of homeowners are eligible”!

This will be about $300 off my monthly payment, knocking it down to about $2000/mo on a 380K principal…so if I make the same overpayment of $4500/mo I think the mortgage will be paid off in about 9 years).

Comment by Al
2009-04-29 11:33:05

So you don’t really need help, but they’ll give it to you anyway? That’ll get the numbers up (Look, we’re doing something!)

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Comment by NoSingleOne
2009-04-29 12:05:55

You’re right, I don’t ‘need’ the help, if you mean that I’m not in danger of imminent financial ruin.

However, my tax money is bailing out morons big and small…it becomes less egregious if I can benefit too.

 
 
 
 
Comment by WT Economist
2009-04-29 06:05:01

I would like just one member of the MSM to ask the President, Treasury secretary, members of Congress the following:

Given that those who took out second mortgages, refinanced, and ran up their credit card debts were able to enjoy the spending and are now walking away or getting bailed out, given that most money invested in the stock market has ended up in executive bonuses, given historically low interest rates as a matter of government policy, and given the likelihood of means testing old age programs such as Medicare and Social Security, providing less assistance to those with more savings…

Objectively, leaving moral issues aside, has anyone who lived below their means and saved been a fool?

 
Comment by michael
2009-04-29 06:40:33

mr. obama,

i will never buy a home as long as it is cheaper to rent. there is nothing you can do to change that.

later.

Comment by VaBeyatch in Virginia Beach
2009-04-29 07:25:07

Don’t say that, or they will mandate that rents go up.

Comment by yensoy
2009-04-29 08:04:55

Yeah 10% sales tax/value added tax on rental units is certainly within realm of possibility.

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Comment by james
2009-04-29 08:24:22

I wouldn’t worry about that. Rents might try to go up but it will not work. People can’t afford it so they will either move away from the higher cost area, cram in with other people or move back in with the parents.

You don’t have the leverage on rents that you have on purchases. Right now, there are a large number of vacant apartments. I think we are at some ten year high with all the accidental landlords on the market. Plus people losing emmployment are retreating to lower cost options.

So. A VAT tax would probably be a neutral effect at best.

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Comment by scdave
2009-04-29 08:27:24

i will never buy a home as long as it is cheaper to rent ??

With interest rates where they are, prices falling like they have and assuming the tax deductions for home ownership don’t change (big assumption), you may be nearing that point now…

Comment by michael
2009-04-29 09:12:38

not where i live…northern va.

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Comment by SanFranciscoBayAreaGal
2009-04-29 11:58:33

Not here on the peninsula, scdave.

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Comment by Jim A.
2009-04-29 09:19:48

Of course you have to compare estimated rents over the course of anticipated occupation. In a normal market rents stand to increase over the years, while with a fixed ammortizing mortgage one’s principal and interest is fixed. When you include lost interest on one’s downpayment and the high transaction costs of RE, in a normal market it takes several years to break even. But after that, you slowly start pulling ahead. In most markets purchase prices are still high compared with rents, and the oversupply of housing is likely to depress BOTH rents and purchase prices for the next several years, making the comparison even more difficult than it usually is.

 
 
Comment by james
2009-04-29 07:01:29

Well. The bondholders will get it in the short. Possibly a large number of pension funds as well.

I see this as massive deflation on two fronts.

First the banks are trying to get a free pass on the misrepresentation on all the loans they put out there. Since the investors will have no recourse that should scare them off faster than ever. Means less securitization market.

Secondly is repudation of debt, possibly on a very large scale. Now, I’d rather see more liquidation so prices drop even lower. This will take longer but will drive prices down too.

 
Comment by realestateskeptic
2009-04-29 08:01:58

Bailing out piggyback loans is a new low, even for this crowd. These were the slime balls who basically created the no money down plan which fueled/created the fire. They knew they were making the riskiest of all loans with zero room for error and based upon suspect appraisals and charged accordingly.

To bail them out creates a moral hazard of epic proportion. I know I should not be surprised or outraged by this at this point, but this really does bother me.

Comment by CA renter
2009-04-30 03:22:06

Nope, we are supposed to be numb to all of the by now.

It’s all good. Now, go rob a bank. You’re a victim, ya know!

 
 
 
Comment by exeter
2009-04-29 05:24:36

Jeez louweez…. I’m still banned from the forum.

Comment by Ben Jones
2009-04-29 05:32:19

OK, OK, I sent an email about this just now. Thanks for your patience.

 
Comment by Rancher
2009-04-29 06:49:23

It’s your Duramax that did it…..

Comment by exeter
2009-04-29 06:56:11

Leave big bertha out this. :)

Comment by hip in zilker
2009-04-29 09:41:29

Oh man, I had to google. I was confusing Duramax with Durex…

:-D

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Comment by exeter
2009-04-29 14:04:19

lmao… i get it now.

 
 
 
 
 
Comment by pressboardbox
2009-04-29 05:36:39

GDP down 6.1%. Let’s party!

Comment by pressboardbox
2009-04-29 05:46:14

MSM intital reaction is to spin inventory reduction numbers as a real positive in setting the stage for the recovery. What recovery? Ask the automakers, heavy equipment, aluminum and steel producers about the lowered-inventory outlook. The inventory has been reduced for a reason: NO DEMAND! (for a very long time) - otherwise they would not be cutting workers right and left.

 
Comment by pressboardbox
2009-04-29 05:50:11

Recovery theorists keep forgetting one thing: THERE IS NO MONEY!

Comment by rusty
2009-04-29 06:33:03

There is no spoon either.

Comment by darthrealtor
2009-04-29 06:39:17

+1 for obscure Matrix reference.

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Comment by michael
2009-04-29 06:43:33

double +1

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Comment by sean
2009-04-29 06:48:40

There is still a lot of Kool-aid.

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Comment by packman
2009-04-29 06:52:39

How about “SPOOOONNNNN!!!”?

:)

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Comment by Jim A.
2009-04-29 07:08:11

Well they ARE discovering that “gravity is a harsh mistress.”

 
Comment by packman
2009-04-29 07:25:10

LOL - Yeah I’ve brought that quote out on HBB a few times. It’s very applicable!

 
Comment by Jim A.
2009-04-29 07:49:35

And of course the bonus deprived bankers are whining “Not in the face, not in the face.”

 
 
 
Comment by mikey
2009-04-29 07:34:10

Plus, even J6p can tend to get a little nervous when he finds out his blind date is a 800 lb dream home gorilla with hot sex on his mind.
:)

 
 
 
Comment by VaBeyatch in Virginia Beach
2009-04-29 05:45:25

Hmmm the new overpriced apartments that are going up everywhere have a new twist. Instead of the signs saying apartments, they are advertised as “Apartment Homes.” Guess calling it an Apartment Home justifies the extra $600/mo they are asking over all the other apartments nearby. Sounds like something a Realtor would think up.

Comment by exeter
2009-04-29 05:54:24

What does “home” mean anyways?

Comment by REhobbyist
2009-04-29 06:14:27

HBBers never confuse “home” with “house.” For me, “home” = where I live, as in “I’m going home now.” Everything else is a house.

Comment by bluprint
2009-04-29 06:49:15

Go home ball!

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Comment by jeff saturday
2009-04-29 06:54:35

Be it ever so humble, there is no place like house.

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Comment by exeter
2009-04-29 07:07:50

What if I live in a straw lean-to on Baja Mexico?

 
Comment by Mr. Drysdale
2009-04-29 07:23:36

What if I live in a straw lean-to on Baja Mexico?

That’s called a mobile home.

 
Comment by VaBeyatch in Virginia Beach
2009-04-29 07:28:29

I didn’t even notice the apartment home thing, but it’s printed on the banners affixed to the fence around the construction site. I’m thinking of ordering some banners to add to theirs.

 
Comment by hip in zilker
2009-04-29 08:37:24

“I’m thinking of ordering some banners to add to theirs.”

saying … ?

 
Comment by VaBeyatch in Virginia Beach
2009-04-29 11:11:07

Not sure about that yet.

I still need to make the 50% off signs for the nearby high end condo building that has all units empty (one was supposed to be sold to the builders family member, but I guess the family member backed out). I plan to have the yellow star things with 50% OFF, and add it to the Realtor’s signs.

 
Comment by Julius
2009-04-29 14:04:31

There are quite a few new apartment complexes around here in Cleveland that never got off the ground - they’re still in the “sign phase”.

In another hilarious note, one condo complex in Cleveland Heights was trying to move units by including a new Smart fortwo with each new purchase. They even had a Smart sitting out in front of the complex for a while next to huge signs extolling how great the deals were. Lately, however, the signs have been taken down and the Smart is parked around back.

 
 
Comment by AdamCO
2009-04-29 08:31:38

I live somewhere that won’t give up its 2006 prices for at least another year or two…and maybe never. But I rent for half the cost of a mortgage. I replanted the whole front yard and have done a lot of landscaping. Sometimes I ask the landlord for reimbursement, sometimes not. It doesn’t matter to me — this type of work brings me satisfaction and I could really care less if I “own” the place or not — it’s where I every night, it’s my home.

I guess I’m responding to the notion that people want to own their own house so they can, “do what they want to with it.”

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Comment by SanFranciscoBayAreaGal
2009-04-29 12:03:08

AdamCO,

We are going to do the same thing. Landscape the backyard and build a fence. We have done other things to our rental. Sometimes we ask for reimbursement from our landlord and sometimes we don’t. It is our home. We want to make it as comfortable as possible for us.

 
Comment by CA renter
2009-04-30 03:27:08

Same here. We’ve put a lot of money and time into our **home.**

Many of our neighbors assumed that we ended up buying the place. They still can’t understand why we would improve a rental.

My grandmother lived in Vienna, Austria. Rented her entire life, and lived in the same apartment, post-WWII, until her death in the late 80s.

Your home is your home, no matter who you pay to live there.

Funny how people don’t get it.

 
 
 
Comment by Al
2009-04-29 06:22:35

I tend to think of home as a safe, secure and comfortable place where I spend time with my family. Safe and secure used to be associated ownership; not so much anymore. I’m betting these apartments are no more homes than any other apartment, thus the only justification for calling them ‘apartment homes’ is usual marketing bunk. This way to the Egress!

 
Comment by rainmayun
2009-04-29 06:36:52

maybe that distinguishes them from “Apartment Offices”?

*shrug*

I did see some “condo offices” still under construction in a part of downtown DC that’s right behind the Greyhound station. Yeah, those’ll sell like hotcakes.

Comment by mikey
2009-04-29 07:44:51

The DC Greyhound bus station used to be scarier than the Guest In-Take Desk at the Hotel Gitmo :)

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Comment by SanFranciscoBayAreaGal
2009-04-29 12:04:41

I’ll up the ante on your DC Greyhound bus station. Ever been to the San Francisco DC Greyhound bus station located on Mission?

 
 
Comment by scdave
2009-04-29 08:40:57

“condo offices”

Hell, Condo everything;

Residential, retail, office, medical, heavy industrial, storage, R/V pads…Did I miss anything ??

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Comment by scdave
2009-04-29 10:49:55

Thought of one more;

Condo parking garage

 
Comment by rainmayun
2009-04-29 12:24:53

they beat you to it - many of the condos in certain neighborhoods in dc, you have to buy the parking spot separately, and some are expensive enough to have a mortgage note!

 
 
 
Comment by james
2009-04-29 06:55:32

I think George Carlin said its a place to put your junk.

Comment by jeff saturday
2009-04-29 10:02:20

He also said
Tonight’s forecast, dark
Followed by widely scattered light in the morning.

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Comment by Jim A.
2009-04-29 06:05:19

Next up, fiberboard housing for the residence free. But really anything that has a bad repuation(deserved or not), will keep changing names. Row houses turn into townhouses, libraries into media centers, handicaped into the differently abled ad nauseum.

Comment by oxide
2009-04-29 07:12:32

It’s a “townhome.” Geesh, get with the Suzanne™-speak.

“House” implies a single family structure with a lawn that you mow yourself. Too many dwellings are not SFH. So they use “Home” to encompasses the entire spectrum, everything from a McMansion to an HOA condo to attached product to an apartment to your sister’s couch. Plus, you get a picket fence and a fireplace and hot cocoa!

 
Comment by Elanor
2009-04-29 09:58:37

Libraries have a bad rep?

Comment by VaBeyatch in Virginia Beach
2009-04-29 11:12:24

Libraries should be outlawed. They deprive the authors of income, like Napster.

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Comment by Elanor
2009-04-29 12:07:34

Gee, and all these years I’ve been grateful for the public library’s bookmobile that used to stop in the church parking lot across the street when I was a child. Every week I’d go there and take out an armful of books, as many as I could carry home. Then I’d spend every spare second reading them.

How shocking to find that I was a Bad Person, depriving authors of their rightful income!

 
Comment by San Diego RE Bear
2009-04-29 12:24:34

“Libraries should be outlawed. They deprive the authors of income, like Napster.”

Not even close. Napster allows you to copy and keep the materials. At the library you have to physically check out a copy that the library bought. Libraries aren’t making thousands of copies and passing them out for free in violation of every copyright law.

And while Stephen King may make a little less money because people borrow his books from the library instead of buying them (BTW he’s a big supporter of libraries due to their influence on his childhood with a single mother who would not have been able to buy the books he read voraciously) many, many other authors in specialized fields have been able to publish due to the demand that libraries create.

If you really think libraries with their specialized collections, highly-educated librarians, and a willingness to serve the greater good have anything in common with Napster you might want to try stepping into one someday.

“I have often thought that nothing would do more extensive good at small expense than the establishment of a small circulating library in every county, to consist of a few well-chosen books, to be lent to the people of the country under regulations as would secure their safe return in due time.” Thomas Jefferson

 
 
 
 
Comment by drumminj
2009-04-29 09:02:26

Yeah, that bugs me about rental listings on craigslist. I want to look for houses….all these apartment managers listing them as “homes” makes that more difficult….grr

 
Comment by ecofeco
2009-04-29 13:37:51

“Apt home.”

Isn’t that like saying “4 wheeled car?” Or “hot water heater.” :lol:

 
 
Comment by SUGUY
2009-04-29 05:48:15

I think perhaps its time to fire Hank Panky Bernanke and TT Timmaaay. It seems that the incompetent bought out Govt executives will be firing incompetent bought out greedy bank executives.

Cash in will not = a greater profit ahead (can we say zombie banks)

April 29 (Bloomberg) — At least six of the 19 largest U.S. banks require additional capital, according to preliminary results of government stress tests, people briefed on the matter said.

While some of the lenders may need extra cash injections from the government, most of the capital is likely to come from converting preferred shares to common equity, the people said. The Federal Reserve is now hearing appeals from banks, including Citigroup Inc. and Bank of America Corp., that regulators have determined need more of a cushion against losses, they added.

By pushing conversions, rather than federal assistance, the government would allow banks to shore themselves up without the political taint that has soured both Wall Street and Congress on the bailouts. The risk is that, along with diluting existing shareholders, the government action won’t seem strong enough.

“The challenge that policy makers will confront is that more will be needed and it’s not clear they have the resources currently in place or the political capability to deliver more,” said David Greenlaw, the chief financial economist at Morgan Stanley, one of the 19 banks that are being tested, in New York.

Final results of the tests are due to be released next week. The banking agencies overseeing the reviews and the Treasury are still debating how much of the information to disclose. Fed Chairman Ben S. Bernanke, Treasury Secretary Timothy Geithner and other regulators are scheduled to meet this week to discuss the tests.

Options for Capital

Geithner has said that banks can add capital by a variety of ways, including converting government-held preferred shares dating from capital injections made last year, raising private funds or getting more taxpayer cash. With regulators putting an emphasis on common equity in their stress tests, converting privately held preferred shares is another option.

Firms that receive exceptional assistance could face stiffer government controls, including the firing of executives or board members, the Treasury chief has warned.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiz06xRmmeOQ&refer=home

Comment by skroodle
2009-04-29 06:24:55

Surely you jest!

Citigroup Seeks Permission to Pay Bonuses: Report

Citigroup has asked the U.S. Treasury for permission to pay special bonuses and is looking for ways to free an energy-trading unit from government restrictions, the Wall Street Journal reported on its
Citigroup Chief Executive Vikram Pandit asked Treasury Secretary Timothy Geithner earlier this month to be allowed to pay stock-based bonuses to employees but the government has not made up its mind yet, the paper reported.

Citigroup executives are describing these as retention bonuses, but the bank is still considering several options of how to structure any bonuses, the paper said.

 
Comment by Al
2009-04-29 06:25:29

Does anyone understand how converting preferred shares to common shares actually helps, besides screwing taxpayers out of dividend payment? There is no actual cash bolstering the banks, just an accounting change as far as I can figure.

Comment by exeter
2009-04-29 06:59:01

It puts the former preferred share holders to the back of the line during bankruptcy. Common share owners left holding the bag.

 
Comment by bluprint
2009-04-29 08:08:09

I’m mystified by this as well. Some preferred stock can be considered similar to debt. Here is a doc (pdf) that discusses capital requirements.

Link

Some highlights:

For the purpose of risk-based capital, a bank’s total capital consists of two types of components: ‘‘core capital elements’’ (which are included in tier 1 capital) and ‘‘supplementary capital elements’’ (which are included in tier 2 capital).

Tier 2 capital consists of a limited amount of the allowance for loan and lease losses; perpetual preferred stock that does not qualify for inclusion in tier 1 capital…

The sum of tier 1 and tier 2 capital less any deductions makes up total capital, which is the numerator of the total risk-based capital ratio. The maximum amount of tier 2 capital that may be included in a bank’s qualifying total capital is limited to 100 percent of tier 1 capital…

So, some possibilities are that the preferred shares have a deduction before being counted toward total capital and conversion to common will eliminate those deductions. Also, perhaps the total amount of tier 2 preferred held by govt exceeds the total tier 1 capital and conversion to common will allow full inclusion in capital requirement measurements.

Comment by Al
2009-04-29 11:12:20

What a horrible read, though thanks for the link. :)

I pulled this out:

“The primary function of capital is to support the
bank’s operations, act as a cushion to absorb
unanticipated losses and declines in asset values
that could otherwise cause a bank to fail, and
provide protection to uninsured depositors and
debt holders in the event of liquidation.”

I’d say the quote pretty much proves they’re falling back on accounting chicanery. Instead of bolstering banks by adding cash and other high liquidity assets, they’re shifting liabilities to capital. Makes things look better on paper. Seems to be the same game with GM and Chrysler.

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Comment by bluprint
2009-04-29 11:51:24

Well, its not that they are necessarily shifting liabilities to capital (maybe they are, I just don’t know for sure and I’m leaning toward “not”), but yeah basically its just some fudging of numbers.

The only reason the prefferred-to-common thing matters is “for the books.” It doesn’t really add any liquid asset to the bank. It may affect the decision by the FDIC as to whether a bank is insolvent.

 
 
 
 
Comment by patient renter
2009-04-29 09:46:14

At least six of the 19 largest U.S. banks require additional capital

In addition to the capital they’ve already received.

 
 
Comment by exeter
2009-04-29 05:48:36

BWHAHAHAHAHAHAHAHA!

NY sales volume volume continues to collapse Mar08-Mar09….. down double digits brothers and sisters….. double digits…. 50, 60, 70, 80%…… schweet!

http://www.nysar.com/pdfs/monthsales.pdf

Hey realturd….. on yer feet and fetch me a 2×4….. and be quick about it.

Comment by Blue Skye
2009-04-29 06:33:00

It’s different here…..not!

Comment by exeter
2009-04-29 06:42:48

“we’re not California or Florida” is in it’s grave.

Next bucolic bull$hit to get shot out of the sky?

“We never had a bubble here so we won’t deflate”.

Comment by Blue Skye
2009-04-29 07:12:19

God ain’t making any more lakefront!

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Comment by james
2009-04-29 07:31:15

You never know. Its quite possible some water accumulates somewhere and makes a new lake. Say Death Valley for example. Could easily see that filling up with water.

Though I’m not sure I’d involve God in all of that.

 
 
Comment by Blue Skye
2009-04-29 07:13:58

The price of land will NEVER go down. People need to eat!

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Comment by Jim A.
2009-04-29 07:14:04

I asked this awhile ago, and I’ll ask again to see whether anyone has any further observations: The S&L crisis premeried in Ohio and Maryland because those states had state chartered thrifts, which ran into trouble before the federally chartered ones, even though those WERN’T oil-patch states. Is there some regulatory reason that CA and FL were the worst states for the RE bubble?

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Comment by Blue Skye
2009-04-29 07:17:36

Everybody wants to live there.

 
Comment by eastcoaster
2009-04-29 07:46:05

Everyone but me.

 
Comment by DennisN
2009-04-29 07:56:26

Nobody goes there anymore . . . it’s too crowded.

 
Comment by yensoy
2009-04-29 08:09:17

Disney

Sea world

Space shuttle

 
Comment by james
2009-04-29 08:29:39

I believe the answer would be prop 13 for California. In boom times the pressure to buy to lock in a low property tax is quite high. Just another accelerating factor.

Plenty of cheap land in the inland deserts or in the back country up north.

Also the mind set of a lot of people here.

Florida has all that cheap inland areas that fill up with retired folks.

 
Comment by AdamCO
2009-04-29 08:33:43

“Nobody goes there anymore . . . it’s too crowded.” - DennisN

That is a hilarious statement!

 
Comment by Jon
2009-04-29 09:40:38

My guess is high population density, very powerful real estate influence in politics, big tourism industry, little other industry, and a significant number of scam artists in the population.

Rank states by these factors and my guess is you’ll see a high correlation with the bubble.

 
Comment by Elanor
2009-04-29 10:57:38

AdamCO, DennisN was quoting Yogi Berra. One of his more famous Yogi-isms. :)

 
Comment by SanFranciscoBayAreaGal
2009-04-29 12:10:00

Because it “Never Rains in Southern California” :)

 
Comment by dude
2009-04-29 14:48:35

Large immigrant population enhanced affinity fraud.

 
Comment by ecofeco
2009-04-29 15:21:55

CA and FLA were the hotspots for many reason, but the 2 main ones are/were weather and the RE mania was just flat out the strongest in those 2 sates.

FLA has a long history of RE speculation.(damn near since the nation was founded) CA has long had a reputation of opportunity and weather. Plus it’s in EVERY damn thing on film and TV. Can’t beat that kind of promotion.

 
Comment by amoney
2009-04-29 16:09:20

Large, dense populations and/or populations in more urban environments are more susceptible to group think. Aladinsane called it the “see me, dig me” attitude in Southern California. You have the attitude everywhere, but not to the degree you’ll find in a NY, LA, SF, etc.

 
Comment by KJ
2009-04-29 16:22:09

Weather is a big part of it, and often overlooked. The top 4 bubble areas:: San Diego, Las Vegas, Miami, Phoenix with Tampa and Los Angeles not far behind.

It can’t be a coincidence that the common denominator to all of those cities is good weather.

 
 
Comment by Blue Skye
2009-04-29 07:16:07

This place better go for a lot. Everything I’ve got is in it!

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Comment by KJ
2009-04-29 08:04:19

What about price changes? Personally I don’t care much about sales volume. I care about price changes.

Comment by Blue Skye
2009-04-29 08:28:23

That comes after the volume collapse. Takes a long time for us backward folks to get the memo.

Comment by exeter
2009-04-29 08:48:54

Prices bottom 4-6 subsequent to volume collapse. The northeast was late to the part and will be last to hit the price bottom.

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Comment by patient renter
2009-04-29 13:00:08

Sales volume is for Realtors. Prices are for the rest of us.

 
 
 
Comment by Mikey(2)
2009-04-29 05:52:15

Remember that joke about the optimist who jumped out of the high-rise window and yelled out at each floor, “All right, so far!” ?
Drop in home prices slows, at last

In another sign the housing crisis could be reaching bottom, a drop in home prices in February, while sharp, was not a record fall….

I’m speechless, I’m without speech.

Comment by phillygal
2009-04-29 06:12:52

And it’s only a .4 difference. They’re crowing over a difference of less than half a per cent.

Did you notice Philadelphia was not included in the survey?

Comment by Mikey(2)
2009-04-29 06:48:45

Not sure why Philly is not in the 20 cities covered in the survey.

Of the 20 cities covered, only nine showed the “improvement in price decline” from January to February. Improvement in price decline over a one-month period. This is just a stupid article.

 
Comment by james
2009-04-29 07:25:16

They don’t cover the third world places.

They stop at Detroit.

Comment by phillygal
2009-04-29 12:07:30

In light of all the recent mayhem in Philadelphia, you would think…

But it’s fifteenth in violent crime, behind Charlotte NC, Baton Rouge, and West Palm Beach, of all places.
America’s Most Dangerous

Assault and forcible rape are included in the stats.

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Comment by michael
2009-04-29 06:45:57

that’s what you call good ole fashioned turd polish.

Comment by NoSingleOne
2009-04-29 07:33:53

What’s the difference between bulls**t and a NAR statistic?

Lipstick.

Comment by SanFranciscoBayAreaGal
2009-04-29 12:12:22

:)

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Comment by bananarepublic
2009-04-29 10:22:30

The news outlets spin any news positively to try to help the market recover. It never works, but it makes their advertisers happy. And let’s face it, the advertisers have a lot more pull than the readers do.

 
 
Comment by measton
2009-04-29 05:53:36

The first four articles on Yahoo

U.S. Economy Shrinks More Than Expected in Q1-

Stock futures point up-

AP World markets rally as swine flu fears diminish-

AP US confirms first death from swine flu- AP

Comment by Muggy
2009-04-29 05:55:17

“World markets rally as swine flu fears diminish”

Amazing isn’t it? Give it a few days, sheesh.

Thank you to whomever posted the other day about the “Now High” addicts. Spot on.

 
Comment by james
2009-04-29 07:28:02

The CDC is saying the death rate isn’t any worse than other flu types going through.

I wonder if this is cooked up media hysteria or what?

Perhaps I can get a discounted vacation to mexico from this! Puerto and Cancun here I come!

Comment by eastcoaster
2009-04-29 07:49:33

I think it’s hysteria.

Authorities sought to keep the crisis in context: Flu deaths are common around the world. In the U.S. alone, the CDC says about 36,000 people a year die of flu-related causes. Still, the CDC calls the new strain a combination of pig, bird and human viruses for which people may have limited natural immunity.

Comment by james
2009-04-29 08:32:54

Yeah. However these things mutate all the time. Every year they try to figure out shots for the latest strain.

I do like the early strong response though.

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Comment by measton
2009-04-29 13:55:54

The death rate is only one factor.

In a normal flu season 32,000 people die. Now a very large percentage of the population gets vaccinated and others are protected by heard immunity, ie if your neighbor doesn’t get it because of a vaccine you are less likely to get it.

This time no one has been vaccinated, so even if the death rate is the same it will still cause more deaths because a higher percentage of the population will get it. Not only that people will stay home from work when sick avoid crowds and travel ect. This could go on from months. How anyone can think that this won’t affect the economy is beyond me.

 
Comment by dude
2009-04-29 15:30:19

“The CDC is saying the death rate isn’t any worse than other flu types going through.”

So the Mexican death rate of 6.36% (159/2500) of confirmed cases is not higher than a normal flu? I find that hard to believe.

If that was the case then each year 9 people where I work would die from the flu, even if only half of us got it. The only person who I’ve ever worked with who died of the flu was also HIV positive.

I’m not saying this is time to be hysterical, but if you show flu symptoms you should see a doctor. This is not your everyday seasonal flu.

 
 
Comment by Elanor
2009-04-29 10:59:11

No irony in those headlines. :roll:

 
 
Comment by Steve W
2009-04-29 06:00:11

Since it seems a bit slow on the board yet this morning, I’ll throw this one out:

Anyone here an “investment banker” or good friends with someone who is? I hear stories about the 18 hour days and the ungodly salaries they receive (or received as the case may be). What the heck are they actually doing for those 18 hours?

Comment by pressboardbox
2009-04-29 06:18:07

Sometimes the tee-times get messed up and the investment bankers will have to spend up to four hours in the clubhouse before going out to play 18.

Comment by CA renter
2009-04-30 03:38:11

Great one! :)

 
 
Comment by skroodle
2009-04-29 06:28:16

I work with a guy that previously worked at Lehman. He said no one would leave until their boss left. Also, they catered in dinner and provided car service to drive them home if they stayed late.

I think he was really disappointed to discover there is not even free coffee at our company.

 
Comment by cougar91
2009-04-29 06:31:09

Run spreadsheets, talk to CEOs, run scenario analysis and revenue projections, and no matter what at the end of the day, always say “It’s time to merge or be priced out forever!”.

Comment by Anonymous Coward
2009-04-29 11:06:26

Steve, I do know many investment bankers, and cougar’s job description is as good as I’ve ever seen.

 
 
Comment by sagesse
2009-04-29 06:35:58

How many investment bankers does it take to earn a huge commission? Five to watch what the competition does, five to get emotional about markets, 10 to woo investors, 50 to develop a computer program that gives the latest edge, and 20 to know where the losses are hidden.

PS I don’t understand anything about high finance. I am just having a poetic moment.

 
Comment by michael
2009-04-29 06:48:44

a year or so ago i saw a photocopy of a $ 1 million bonus check written to a friend of a friend who was a commodoties trader.

he was 26 years old.

 
Comment by Bob in Vegas
2009-04-29 06:49:33

It’s the $600 rebate that you probably did not receive in 2008.

Comment by Bob in Vegas
2009-04-29 06:56:12

The above is in the wrong place.

Anyway, 18 hour days for investment bankers, eh?

Let’s see: drugs, computer games, drinks over a 3 hour lunch, sex in the file room with the adminstrative assistant, drinks over a 3 hour dinner…

 
 
Comment by rainmayun
2009-04-29 07:04:36

My girlfriend was an IB at Lehman until a couple of years ago, working crazy hours. They spent a lot of time building and refining models, building presentations to clients, that sort of thing. The higher up the chain you go, the less likely you are to work those crazy hours. But like any job, they create unreasonable deadlines and then work the rank & file (such as it is) to death.

Comment by michael
2009-04-29 09:15:07

“But like any job, they create unreasonable deadlines and then work the rank & file (such as it is) to death.”

never enough time to do it right…but always enough time to do it over.

 
 
Comment by Elanor
2009-04-29 10:17:46

I met a young IB recently on vacation–her first in years, and her friends had to drag her away from work to take the trip. She spent most of the 10 days catching up on sleep. She was a pretty quiet person, quite unassuming and according to her friends, very driven. She didn’t seem to mind the crazy hours she worked. I forget who she worked for, but this was after the Lehman debacle and the Merrill Lynch sale, so her job appeared to be safe for the time being.

Comment by NoSingleOne
2009-04-29 10:50:38

If they work so hard and are so bright, how come so few of them saw this mess coming? Just curious.

Comment by bluprint
2009-04-29 11:23:22

b/c they study finance and ignore economics.

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Comment by Elanor
2009-04-29 12:18:05

Steve W asked if anyone knew an investment banker. This was my *one* IB acquaintance. She seemed a docile, go-with-the-flow individual, but I wouldn’t generalize to envision all IBs as being like her. In fact, it seems that an aggressive personality would be more suited to the world of Haut Finance.

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Comment by CA renter
2009-04-30 03:40:22

Good question, NSO!

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Comment by samk
2009-04-29 06:00:13

Citigroup need to pay bonuses

http://www.msnbc.msn.com/id/30469527/

in order to keep their poor, disillusioned, demoralized workers from jumping ship. Which, I guess, would cause Citigroup to fail.

Hmmm.

Comment by darthrealtor
2009-04-29 06:27:30

I just discovered a few days back, while reading the Financial times, how the banks actually made profits last quarter.

Basically it boils down to reclassifying their own bonds as assets instead of liabilities and buying them back from investors. If investors don’t want to sell the banks then take CDSs on them, basically ensuring profits if their bonds tank.

Even I don’t fully understand the complexities of this nuttiness the bottom line is that the closer a bank is to failing the more profit they make on their bonds.

This type of financial cannibalism is downright sad.

Comment by sagesse
2009-04-29 06:43:02

The argument about “having to retain talent, and therefore having to keep paying large boni” is exactly due to the fact that only clever (and borderline criminal) minds can come up with these schemes, and the banks cannot afford to let these people go. Same arguments in Europe from the big bosses. This is not about simple book keeping.

Comment by Professor Bear
2009-04-29 07:53:22

“…and therefore having to keep paying large boni”

You misspelled ‘boners’…

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Comment by bluto
2009-04-29 09:34:10

It’s a result of mark to market accounting. As a firm’s credit gets worse, the rate they must pay rises and the lower the price of their existing (originally lower rate debt) must go. Since market prices fall, and the debt must be market to market you reduce the value of a liability (theoretically you could buy it back to do the same thing) which results in income. It’s not that complicated, and works exactly the same way as falling asset prices.

Comment by Al
2009-04-29 11:16:47

“It’s not that complicated, and works exactly the same way as falling asset prices.”

Except they ignore falling asset prices.

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Comment by bluprint
2009-04-29 11:27:00

Exactly. They use MTM when it suits them but want to use mark to fantasy otherwise.

The idea of showing income on the falling value of debt isn’t crazy (same as the IRS taxing you on forgiven debt) but not being consistent with assets is dishonest.

 
Comment by Al
2009-04-29 11:38:24

I’d still argue they shouldn’t be marking their debt to market, since it’s very unlikely they can buy much of it back (impossible to realize the gain). If they actually buy it back, so be it, put the gain on the books.

 
Comment by bluprint
2009-04-29 12:13:32

I’m not real hung up on that. I’m a proponent of MtM accounting. I think to be consistent it should be done across the board. Doing MtM on assets and using a cost method on debt isn’t bad (although less accurate imo). I can see it for conservatism.

Doing MtM on debt and MtFantasy on assets of a similar nature is simply dishonest. There should be a GAAP rule that if you do MtM on a class of liabilities you HAVE to do it on any securities of a similar nature you hold as assets.

 
 
 
Comment by bananarepublic
2009-04-29 10:24:00

If you don’t regulate the shit out of Wall Street, these gangsters will do this crap every day of the week. Regulate them into oblivion.

Comment by bluprint
2009-04-29 11:31:04

Who is going to regulate them exactly? FASB has rules to require using fair value and the Dems bring down the hammer to get that modified and let the financial institutions behave this way.

Maybe you think the Repubs will come to the rescue.

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Comment by Anonymous Coward
2009-04-29 11:23:05

“Basically it boils down to reclassifying their own bonds as assets instead of liabilities and buying them back from investors. If investors don’t want to sell the banks then take CDSs on them, basically ensuring profits if their bonds tank.”

You’re referring to the “fair value option,” and it’s even worse than you think. They don’t even have to buy back bonds to earn the income. It’s based on the theory that if they wanted to buy back the bonds to retire them, they would have to pay less for them, so they’ve experienced a gain. (Of course, usually the reason that the value of the debt is going down is that they have no cash, which would seemingly be necessary to buy back the bonds. But I digress…)

When an asset they own goes up, a bank earns income; when an asset goes down, the bank has negative income (a loss). Using the fair value option means that if the value of a bank’s own liabilities goes up (e.g., the bank becomes a better credit risk or market interest rates go down and the interest rate on the bank’s debt is fixed, etc.), they have a loss. If this seems confusing, just remember that logically it’s the opposite of what happens with an asset. If you owe the money, the value of what you owe going down is a gain to you. Historically, conservative accounting principles required debt to be reported at amortized cost. Allowing a bank to report this at market value means that when the market starts to view the bank as a bad credit risk, the bank gets to report gains. Makes no sense. Citigroup has been reporting gains on this for some time. Lehman’s last quarterly report before it imploded had a huge gain from this, as you can imagine. But people just latch on to the earnings numbers an don’t look behind it very often.

David Einhorn made a funny statement about this once. Something along the lines of, “You mean to tell me, the most profitable day in a bank’s life will be the day it declares bankruptcy?” And it’s true. It is, at least in terms of the one-day profit it gets to book when the value of it’s debt plunges to pennies on the dollar. Makes no sense.

Comment by bluprint
2009-04-29 12:26:17

Makes no sense.

I disagree, see my post above. It makes total sense. If the value of your debt goes up, then you are losing money on opportunity cost of your interest payments. (this change implies you are paying more interest than you could get in the market) I don’t see why this shouldn’t be measured.

IMO, by not allowing debt to be measured at market you are preventing measurement of the volatility/risk that is realized by a firm when it takes on debt. Actually, one of the main arguments aginst this type of acctg is that by using a cost basis, it removes volatility. My counter-argument is that we should strive for neither artificial volatility NOR artificial stability. The financial statements should simply farily represent the firm, warts and all.

People don’t like the fact that a firm could realize a gain by becoming more of a credit risk (you give Citi as an example) but the problem with that thinking is that you are only thinking about the debt. If they are really becoming a credit risk, it’s probably because they are losing money operationally which will offset the gains from the right side of the sheet.

In the case of Citi, govt. has decided they are fine with allowing fair value accounting for the debt but fantasy acctg for assets. It’s this lack of consistency which has created artificial gains in Citi. Blaming fair value acctg is taking a very narrow view when you should be considering how both sides of the balance sheet are valued.

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Comment by Anonymous Coward
2009-04-29 17:39:50

Nonsense. If we want to move toward market values on balance sheets–which obviously we have been doing since SFAS 115–that’s great, but big swings from such market adjustments should go directly to equity via OCI. Otherwise, there is too much noise in earnings. It’s not even a real gain to the company if the company is not even in a position to retire any of it’s debt, much less all of it. If we want an MV balance sheet, fine, but we also need a realistic income statement.

 
 
 
 
 
Comment by pressboardbox
2009-04-29 06:25:30

Cramer says he’s going ‘all-in’ on a housing bottom by buying investment houses. I can’t post a link because it is a pay-site, but I can assure you that this headline is true.

Comment by Michael Fink
2009-04-29 06:49:41

Cramer needs to read Shiller’s graph. Even he doesn’t seem to understand that houses appreciate at a predictable rate, and that; over long periods of time, they simply pace inflation.

Unless he’s buying below the inflation adjusted price from 1999 he’s not making a good deal. Cramer is rich, so, perhaps for him, the deductions/etc that he can claim having lots of investment homes out there make it worth it. For the normal buyer; not a chance in he**? I’ll spare everyone the speech, but the normal buyer cannot afford the potential loss of having such a huge, highly leveraged purchase move against them. Cramer can. That’s the difference.

Comment by Bob in Vegas
2009-04-29 07:00:51

Who in their right mind would take on a 30 year liability (mortgage, taxes, insurance, maintenance & repairs, vacancies, deadbeat tenants, liability for gas and electric bills when the deadbeat tenant doesn’t pay) and call it an “investment?”

Comment by DinOR
2009-04-29 07:27:19

Bob in Vegas,

NOT… that every word you’ve shared isn’t true.., but ‘my’ major malfunction is that the entire Rental Property Model is irreversibly broken!

Even multi-family is f’d. Developers have dithered on whether it’s an apartment, apartment “home” as noted above, re-partment, condo, loft, lease2own etc.

True the pricing is muddled enough, but it’s the model that scares me? It’s like taking your shoes to a cobbler and when you go to pick them up as agreed he says, “Oh, someone came in and offered me DOUBLE what you can buy them on the open market for so what could I do? Here’s your “cut”.

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Comment by scdave
2009-04-29 09:09:05

I can make a strong case for real estate as a investment if purchased prudently…

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Comment by eastcoaster
2009-04-29 07:55:16

…houses appreciate at a predictable rate, and that; over long periods of time, they simply pace inflation.

What would a “normal”, “historical” appreciation rate be - 4%, 5%? I’ve been looking at 1998 prices adjusted for inflation at 4, 5, 6% to come up with what I think a reasonable price range should be. Not even close around here. Can’t imagine a day when it will be.

Comment by Blue Skye
2009-04-29 11:39:03

Compare with the price advance of a psotage stamp. Should get you close.

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Comment by patient renter
2009-04-29 13:05:24

it’s whatever inflation is, averaged, per shiller.

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Comment by scdave
2009-04-29 08:59:34

Even if he is correct, the damage is done from a financing standpoint…Real Estate finance has irreversibly changed going forward…You think residential finance is tough, try to get commercial financing particularly for obscure product…

Comment by DinOR
2009-04-29 09:41:52

scdave,

Right, I hadn’t even considered it from that standpoint. Of late, if you’ve been on (1) REIT conf. call, you’ve been on them all! “We’re seeking bridge financing for our ____ property…”

And even if you ‘could’ secure a loan, what are you going to do w/ it? Not even simple people trust property mgrs. any more and tend to view renting as really only a month-to-month arrangement, if that.

Think back to all the decent long term tenants they threw out in the street to do an “apartment conversion” and you’ll get an idea as to the level of damage that’s been to trust out there? They’ve taken one of the simplest of transactions and tortured it beyond all repair.

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Comment by NoSingleOne
2009-04-29 07:37:58

Why would anyone listen to this doofus? How many bottoms has he called already?

Too bad cramerwatch.org went offline. They used to pit his picks against a monkey’s. I think the monkey was winning.

 
Comment by Professor Bear
2009-04-29 13:07:09

I’m stoked to watch Cramer catch falling knives!

 
 
Comment by wmbz
2009-04-29 06:27:43

“Make no mistake. We are selling off our future and the future of our children to prevent the bondholders of US financial corporations from taking losses. We are using public funds to protect bondholders of some of the most mismanaged companies in the history of capitalism, instead of allowing them to take losses that should have been their own.”

-John Hussman

Comment by scdave
2009-04-29 09:11:16

nice post wmbz…

 
Comment by Jon
2009-04-29 09:49:14

Those bondholders are our own 401K’s, the nice folks who sell us our oil & the nice folks who actually make the stuff we buy. Sorry, but we need that stuff more than we need our children to have a future.

Comment by Carl Morris
2009-04-29 10:52:41

I think a stable and productive (and FREE) future for ourselves and our children trumps all those things.

 
 
Comment by ecofeco
2009-04-29 16:07:02

Ah, the fine folks who brought us “Global competition” and “Free markets” and “Deregulation” and wage cuts or freezes and tougher personal bankruptcy and disappearing pensions and more expensive medical insurance and bait-n-switch credit with usury rates and never asked YOU if you wanted your retirement gambled with… can sure dish it out, but they can’t take it.

Lying, thieving criminals, every last one of them and they have destroyed our society.

Don’t ever forget it.

 
 
Comment by Michael Fink
2009-04-29 06:39:38

Please feel free to attack me for being off topic, but this is the BB, and this does relate to economic bubble, so please be gentle.

There’s an article today in our local paper about how people aren’t using the airport lots because they are too expensive. They further went on to say that the short term lot is a ghost town (nobody uses it at all). This, IMHO, is all due to one fact that all these people seem to overlook.

Airlines (and travel of all sorts) has always looked for and tried to cultivate the business travel crowd. They are high margin, and typically using expense accounts, so are price insensitive. In the past, prices were raised on “business type” travel to try to capitalize on this opportunity (try booking a ticket this evening on a major carrier to fly out tomorrow morning, you’ll see!). In the past, this has worked well, and the airlines/travel industry has been able to capture a significant more amount of revenue from the business traveler.

However, like the morons they are, they figure if a small (I’d guess 100%) uptick in revenue is good, a HUGE uptick in revenue must be better. So, for example, US Air has a flight I used to take regularly from PBI to CLT; which I almost always booked last minute. The flight used to cost ~650 round trip (which, just to put into perspective, if you booked 2 weeks early, would cost about 150 dollars). Now, when I look at the same flight (I haven’t had to fly it in a long time), it can cost upwards of 1000 dollars for the 1 day (up to CLT in the morning, back in the evening, last minute, coach) ticket. That’s too high for me (and many others) to just run on their expense accounts, and, as such, I would have to fly a different airline (discount carrier) instead. A discount carrier (on that route) is probably about 200 dollars (last minute ticket).

The other example is first class tickets; like most companies, we are no longer allowed to book ANY first class at all. However, years ago, we used to fly first class quite a bit, the FC seat was about 2X the price, and the company would absorb that. Now, on many routes, a FC seat is 5X the price; as such, the company totally put the kabosh on it; we’re not allowed to do it at ALL anymore. This is a HUGE amount of revenue lost (especially since I’m elite on some airlines and get upgraded anyway, I’m in the SAME seat, but paid 1/2 the cost to get there, and will NEVER pay the 5X cost that they demand for it). If they made these tickets just outrageous (2X the cost of coach) and not “must be smoking crack insane” (5-10X the cost), I would guess they would make MUCH more money on those seats (which, today, are pretty much ALL used by elite travelers, I don’t know anyone who actually buys FC seats anymore).

Finally, short term parking (which was the article that I read) at the airport. Short term used to be 1.5-2X the cost of long term. We used to be allowed to expense ST parking. However, ST in most airports is now 3-5X the cost of long term; as a result, we’re no longer (and most people aren’t) allowed to expense it. And the ST lots? Almost always totally empty (I do know some business travelers who are still allowed to expense ST parking, but not many).

This, IMHO, is just another example of the mentality of trying to just RAPE people on transactions. There’s a certain level where you raise the price and people just won’t pay it; I think that we reached that level a long time ago in both the housing market, and in some of the business travel market.

Comment by Bill in Carolina
2009-04-29 07:16:16

Segue into a WSJ article this morning about how the NY Yankees seriously overpriced tickets for their up-close seats and are now offering them at up to half off their former asking prices. With Wall Street employment having been seriously downsized, good luck selling and filling those seats.

Comment by jeff saturday
2009-04-29 08:21:20

But they are not making Yankee Stadiums anymore, Oh wait they are.

Pricey seats at new Yankee Stadium a Bronx bomb
By RONALD BLUM AP Baseball Writer
Posted: 04/22/2009 03:10:19 PM PDT
Updated: 04/22/2009 08:27:07 PM
At the new Yankee Stadium, the best seats in the house have turned out to be the emptiest. The most expensive spots in America’s costliest ballpark have become an embarrassment packing a financial sting to the proud New York Yankees, as the Legends Suite section in the infield has been filled only once in the six games since the $1.5 billion stadium opened last week.
On most days, the seats that cost $500-$2,500 as part of season tickets and go up to $2,625 for individual games haven’t been close to full. And as TV cameras pick up the patchy attendance with every pitch, it serves as a little tweak to the nation’s richest baseball franchise.

“We’re done talking about seats,” Yankees president Randy Levine said Wednesday. “We’re not talking about seats.”

 
Comment by scdave
2009-04-29 09:15:46

I hope the Yankees lose their a$$…Pro sports and baseball in particular need a good dose of reality check and this downturn just may usher it in…

Comment by Julius
2009-04-29 19:54:58

Especially the Yankees, who have consistently had the MLB’s most outrageously overinflated payroll for at least the last half-decade.

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Comment by Skip
2009-04-29 07:44:30

You forget that airports exist in order to exist. There is not really anything like a profit/loss for an airport.

Next time you fly, pay attention to how many airports are under construction. You might find that most are continually building/tearing down something in order to be able to obtain the passenger facility charge ($3-$4.50 per segment) on your ticket.

 
Comment by Al
2009-04-29 07:55:30

As an experiment, reread this posting with the following subsitutions:

1) ‘airports’ for ‘hospitals’
2) ’short term lot’ for ‘primary care’
3) ‘first class ticket’ replaced by ‘CT scan’.
4) whenever it talks about employers banning using a service, pretend it’s an insurance company/HMO

Comment by DinOR
2009-04-29 08:06:39

Michael Fink,

Another example of “The Wealth Effect” run amok. When your house is going up $10,000 a week, WGAF about paying $4 freaking dollars for the nominal “convenience” of using a cart to go 300 feet?

I have to pick my SIL up at PDX this evening and I must say… I’m as usual “looking forward” to it? I really hate to say this but our lack of being ‘vocal’ brought this on ourselves. IMHO.

Comment by yensoy
2009-04-29 08:34:35

When I visited SEA last the smartcart rates had jumped to $4. Yeah that’s too much for me. Of course I can afford it but I refused to use it as a matter of principal.

They used to drop a token for every returned card back when the rental was $1 (or 2?) - the token was a 25c credit towards your next use. That cashback is still stuck at one token worth 25c.

Seatac airport gets money from a portion of the county/area sales tax. It gets money from passengers thru ticket levies, parking, shopping/food sales and the $4 smartcart. Given that folks in & around Seattle don’t have much of an alternative for most destinations, Seatac airport has a captive audience. I see no reason for the taxpayers to subsidize this operation.

What bugs me is how high the rental tax is when renting from the airport. Interestingly, I can rent at a non-airport location for much less, and now that the light rail is imminent that’s a great alternative.

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Comment by Skip
2009-04-29 08:46:26

Lots of places, like Dallas, use the rental tax to pay for arenas for hockey and basketball teams to play.

They figure the people renting cars and paying the taxes don’t vote in that municipality.

Light/Heavy rail in Dallas has carefully avoided both Love Field and DFW Airport.

 
Comment by Jon
2009-04-29 09:59:36

In Florida:

Airports fuel tourists
Tourists fuel gas & sales taxes
Gas & Sales taxes fuel roads
roads fuel housing developments
housing developments fuel profits for developers
profits for developers fuel campaign contributions for politicians
politicians build airports.

The virtuous cycle.

 
 
 
 
Comment by KJ
2009-04-29 08:11:46

I travel a fair amount and can say I have not seen any decrease in demand for the more expensive parking. The difference between close in and far out is $4/day ($14 vs. $10). Unless you get to the airport before 8am, the close-in lot is full and you’re stuck out in the boonies with a 15 min walk to the terminal.

Comment by Michael Fink
2009-04-29 08:37:19

Perhaps your airport doesn’t have the same kinds of lots that I’m whining about above. :)

Our 2 choices are 12/day (for onsite, good parking) or 36/day (for short term, right next to the terminal parking). It’s the 36/day lot that’s empty; which, IMHO, is because of the endless raising of that lot’s price (it used to be 18/day) to the point where I get notes in my corporate e-mail box that “We will no longer pay for ST parking at the following airports”. These lots are used almost exclusively by business travelers (as are FC seats, lounges; etc) and they’ve made all these “services” SO expensive (raping the consumer, imho) that now nobody uses them at all anymore (because all the corps are specifically barring us from using them).

It’s just an extension of all the stuff that we normally talk about; incredible increases in price based (IMHO) mostly on MEW and housing mania. At some point (and that point has certainly been reached at FLL and PBI) the price becomes SO high that nobody will use it anymore, resulting in crashing revenues.

And, just like the housing bubble, I wonder if this can be put back in the box again? I (and most other business travelers) are not allowed to use FC at all anymore, regardless of the cost. If they made it “reasonable” again, would my (and other) companies reverse their stance? Will any business travelers ever be able to park in the ST lot again? Or has the shift occurred, and, almost regardless of price, the policy will say “No FC, no ST lots, no lounge, etc”. If that happens (and it already has to some degree) these airlines/airports are in for a world of hurt, all because of their own greed.

Comment by Mikey(2)
2009-04-29 09:12:33

Greed, supply/demand, it’s all the same, right? So I don’t see fault with the airport for pumping its prices as high as it could while there was demand for it. Prices should come down as demand falls, and once reasonable levels are reached, people will jump back in to FC, ST parking, etc….

As in housing, if you’re looking for fault, I would look for it in how they used this influx of capital during a time of unprecedented, unsustainable demand. Have they spent the increased revenue like homeowners have spent their faux equity, or have they held on to the cash to weather the inevitable downturn in the market?

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Comment by KJ
2009-04-29 09:49:21

Isn’t short term meant for , uhm , short term as in picking up/dropping off? Short term at my airport works out to something like $40 a day too but nobody in their right mind parks there for more than an hour or two.

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Comment by drumminj
2009-04-29 10:02:52

I learned the hard way that the ONLY parking at SeaTac is $24 a day or so….in Austin, the long-term parking was like $6 a day. Sadly, I didn’t look into it ahead of time and ended up paying $72 to park for the weekend….ugh.

 
 
 
 
 
Comment by packman
2009-04-29 06:46:04

Just thought I’d throw this out there for aladinsane, in case he’s reading. I know he’s got a big problem with the current big gun scramble. That doesn’t seem to reconcile with the writings of his mentor though.

I’ve been reading (listening on CD actually) Atlas Shrugged. It’s a great book (oh so long, but very good IMO). This morning I got to the famous Francisco d’Anconia “money speech”. Being a big Atlas Shrugged person, I figured alad probably knows it by heart. He seems to have missed one important concept though, in this portion:


“Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter. So long as men live together on earth and need means to deal with one another–their only substitute, if they abandon money, is the muzzle of a gun.

“But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich–will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt–and of his life, as he deserves.

“Then you will see the rise of the men of the double standard–the men who live by force, yet count on those who live by trade to create the value of their looted money–the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law–men who use force to seize the wealth of disarmed victims–then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter. ”

I’ve highlighted the key words for him.

Alad if you’re reading - thoughts?

Comment by michael
2009-04-29 06:54:45

so we should accept the mozillo’s of the world cause hitler is worse?

Comment by packman
2009-04-29 07:07:24

The Mozillo’s of the world are merely tools of the looters (the PTB), and are inconsequential in the scheme of things. If Angelo didn’t exist someone similar would have been in his place. The key is that those with the power have already done the damage. Don’t buy into the MSM crap that this bubble was caused by unrestrained free-market capitalism, when the truth is quite the opposite.

Comment by Jon
2009-04-29 10:05:37

Do tell. What restraints on free-market capitalism caused the bubble?

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Comment by drumminj
2009-04-29 10:19:00

Umm…the FED/below-market interest rates, for one…

 
Comment by packman
2009-04-29 10:19:57

It would be quite a long list, but topping it would probably be these two:

1. Artificial influence due to bailouts and backstops. E.g. see this article from WSJ yesterday -

Instead, the capital is intended to cushion the banks against potential future losses under dire economic conditions. Federal officials say they won’t allow any of the top 19 banks to fail.

That one sentence provides an incredible competitive advantage over the other 8000+ U.S. banks that aren’t part of the select 19.

2. The Federal Reserve’s failed interest rate policy, artificially influencing the markets by providing ultra-low interest rates to its members, inciting excessive risk which provides advantages to member and larger institutions.

There are many many others, e.g. government housing assistance, etc.

By the way - I never stated that restraints on free-market capitalism caused the bubble. I only stated that it was not caused by unrestrained free-market capitalism. They are not the same statement.

In fact a significant contributor to the bubble was indeed the removal of some specific restraints. However it was more the act of removal of the restraints, and the corresponding assistance to specific institutions, rather than the non-existence of those restraints, that contributed to the bubble.

 
Comment by packman
2009-04-29 10:25:04

Posted a long post with a link that’ll show up eventually.

I’ll summarize with this statement - probably 95% of people equate “free-market capitalism” with a lack of government regulations restricting specific activities. These 95% of people are missing the bulk of the true picture, which goes way beyond restrictive regulations. The big financial entities know this, and use it very well to their advantage.

 
Comment by NoSingleOne
2009-04-29 10:57:02

Can’t wait to see your post, Packman. I have my doubts about the ability of any industry to self-police when it makes the bulk of its money by keeping information from other people or behaving like a giant casino.

I don’t consider it to be a free market when the playing field isn’t level. Not sure how a market can be truly free without external oversight and rule of law. The looters don’t come with tattoos on their foreheads.

 
Comment by Pinch-a-penny
2009-04-29 11:10:18

Four words….. Too big to fail.
Think about it.

 
Comment by NoSingleOne
2009-04-29 11:15:40

it was more the act of removal of the restraints, and the corresponding assistance to specific institutions, rather than the non-existence of those restraints, that contributed to the bubble

This doesn’t make sense to me.

How did securitization result from a removal of restraints or subsidization from low Fed fund rates? Derivative trading never had restraints, so you can’t argue that removal of restraints led to the “innovative” financial games played by companies like AIG. The bulk of pre-bubble regulation was about leveraging and capitalization requirements. Not sure how if those never existed that everyone would have been better off. Finally, Chinese and Saudi sovereign and private investor funds made the cost of borrowing overly small for American banks. The Fed Funds rate had nothing to do with that. Greenie only lowered those in response to the Stock Market and dips in consumer spending.

 
Comment by packman
2009-04-29 11:57:07

Some examples (I’m sure there are many more). I really don’t have time to keep doing this though.

You’re *very* wrong when you say derivatives trading never had any restraints.

Restraint removal, at the urging of the big guys who were in a position to take advantage of them:
article

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge…

- CDS deregulation
(note that CDSs were invented by JP Morgan & Co)

I’d be curious about your statements of Chinese and Saudi coverage impact interest rates - I seriously doubt they made any significant impact, certainly less than was made by our own Federal Reserve (upon which many ARM’s rates are directly based). I’m open to hearing about it though. Nevertheless - are you seriously suggesting that the low mortgage interest rates of 2001-2004 were *not* caused by Greenspan’s actions?

Obviously Greenspan lowered rates in response to the 2001 recession - that’s exactly my point. Rather than let the free market work its own way out of the recession, the Fed induced artificial influence. I.e. - not free markets. In a free market system, interest rates would be set by individual lending institutions based on their own individual institution’s perceived risk, rather than by a single oligarchical institution.

Other examples of not-free-market influence (in addition to FDIC, FHA, GSE backstops) include:
- The CRA (initial act in 1977, but mainly reform and emphasis in 1993)
- Tax rules on interest deduction (allowing deduction for mortgage interest but not other interest)
- Fannie and Freddie’s push of easy credit (loosened regulations in the 1990’s, push of subprime by 1992 by FHEFSS Act,
- 1997 change making 250k/500k of home capital gains excempt from income tax
- 2003 American Dream Downpayment initiative

In short - there were tons of both legislative actions and Federal Reserve actions that caused this bubble. Not free markets.

 
 
 
 
Comment by Zombie Banks
2009-04-29 07:11:02

He’ll read at 4am our time. Time change.

 
Comment by NoSingleOne
2009-04-29 12:00:32

I don’t see any difference between the idealism of Ayn Rand or Karl Marx. Both of them have an incomplete and idealized understanding of human nature. Both of them had interesting ideas that if practiced in limited, common sense fashion are beneficial to society. Neither of them should have any influence on government economic policy.

But enjoy Atlas Shrugged as a work of fiction. I sure did. If you make it through John Galt’s speech without wanting to defenestrate, kudos. ;)

Comment by packman
2009-04-29 13:55:06

Defenestrate the book, the PTB, or myself? :)

 
 
 
Comment by Rich
2009-04-29 06:51:05

On a side note, I wanted to get some land I own appraised so I called some local appraisers (I called 3) and guess what ? phone is disconnected and no longer in business. Guess these guys folded their tents and skipped town.

Comment by milkcrate
2009-04-29 09:02:21

We poked around a commercial building earlier this year. Didn’t buy (long story), but when the lender asked about ordering an appraisal, we said we wanted an inspection but would prefer a $250 “broker’s opinion” rather than a $2,500 appraisal. This is a building and market we are very familiar with, so we were confident moving ahead without the full-blown appraisal. Surprisingly, at least to me, the lender agreed to the opinion idea.
The deal eventually fell apart when a lender attorney noted that the title declared that an known third party had some rights to interior wall ownership. So it unraveled with that bit of mystery.

Comment by milkcrate
2009-04-29 09:44:13

unknown third party, natch.

 
 
 
Comment by AbsoluteBeginner
2009-04-29 07:03:33

“Pork is safe to eat.”

Comment by Al
2009-04-29 12:09:16

“…. but more fun to grease up and chase around the yard”

 
 
Comment by wmbz
2009-04-29 07:10:06

Who said this?

“I accuse the present Administration of being the greatest spending Administration in peacetime in all American history–one which piled bureau on bureau, commission on commission, and has failed to anticipate dire needs or reduced earning power of the people”.

“Bureaus and bureaucrats have been retained at the expense of the taxpayer…..We are spending altogether too much money for government services which are neither practical nor necessary. In addition to this, we are attempting too many functions and we need a simplification of what the Federal government is giving to the people.”
It was FDR in his 1932.

Comment by Hwy50ina49Dodge
2009-04-29 07:19:06

“…It was FDR in his 1932″ ;-)

I’ve sent him an email to verify your post…;-)

“Byrd was born Cornelius Calvin Sale, Jr., in North Wilkesboro, North Carolina, in 1917.[4] When he was one year old, his mother, Ada Mae Kirby, died in the 1918 Flu Pandemic.”

Robert Byrd
From Wikipedia, the free encyclopedia

 
Comment by packman
2009-04-29 07:28:46

“‘What is Irony?’ Alex”

 
 
Comment by Hwy50ina49Dodge
2009-04-29 07:10:36

Poetry from… “Lost Wages” ;-)

“We have had a first-class economy and a third-class culture, and eventually a third-class culture will bring down a first-class economy,” said Rogers, in his Las Vegas office decorated with life-size cardboard cutouts of the Three Stooges dressed in graduation caps and gowns.” ;-)

“Who has money they can spend on higher taxes?” Burns said. “Next door in California, they have every tax you can think of, and they’re in worse shape than we are.” ;-)

Viva Las Vegas Fails Schools as Nevada Plays Russian Roulette:

By Oliver Staley April 29 (Bloomberg)

Comment by Reuven
2009-04-29 07:16:10

As many people have predicted here, crime in the most bubbly cities will rise the fastest. Latest crime surveys show Orlando and Las Vegas in the top 10 for violent crime….Third World here we come!

Comment by DennisN
2009-04-29 08:06:08

Forbes had the stats the other day, accessible via Yahoo news. Stockton’s also in the top 10, as are Miami and Detroit.

Comment by DennisN
2009-04-29 08:08:36
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Comment by DinOR
2009-04-29 08:11:40

DennisN,

Patrick posted an article from the SacBee where over a dozen homes had been sold for -under- 25k in the last month! Oh and infestors are delighted to put in multiple bids.

So glad it’s working out for them, no way ‘that’ won’t cash flow positive huh? Can’t vouch for the caliber of “neighbors” you’ll have but..?

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Comment by exeter
2009-04-29 07:22:16

OT topic-

MS is pushing IE8 as a high priority update. I tried it weeks ago and removed the turdly application. It majorly sucked. Does high priority status of IE8 imply that IE7 is swiss cheese?

Comment by DennisN
2009-04-29 08:11:20

I had lots of problems loading sites with IE7 which upgrading to IE8 fixed. Most importantly, my local newspaper, the Idaho Statesman. With IE7, the IS site would take 3-4 minutes to load OR would crash the system, requiring a hard reboot.

 
Comment by David
2009-04-29 08:13:48

I had daily freezes on IE7. This is two different computers so it probably isnt a hardware issue. I switched to firefox, and it is much more reliable. I still have to use IE7 for hotmail, and this still frequently locks up.
Microsoft had the browser market completely to themselves, it was their market to lose. And they are losing it by not focusing on basic reliability.

Comment by Jon
2009-04-29 10:11:50

People still use Microsoft products?

 
 
Comment by Kim
2009-04-29 08:14:21

I updated two weeks ago too, and it was a disaster for me as well.

 
Comment by bluprint
2009-04-29 08:14:57

Without more specific information, it only applies they really, really want you to use it. Perhaps b/c IE7 is, as you put it, swiss cheese, perhaps because they have finally figured out how to include mind-control into their software and are eager to get it rolled out.

 
Comment by realestateskeptic
2009-04-29 08:17:26

They should be pushing Firefox…..

Comment by yensoy
Comment by yensoy
2009-04-29 09:06:50

That was in response to the implication that firefox is less swiss-cheesy. Sure it’s a great browser but bulletproof it is not.

As for Chrome, it updates behind your back so you really don’t know what’s going on with it.

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Comment by Michael Fink
2009-04-29 08:44:08

Switch to FireFox, I’ve been using it for years, it’s much better (and most importantly, FASTER) then IE7 (I haven’t tried 8). You’ll love it, everyone who tries it does.

Comment by drumminj
2009-04-29 09:49:04

AND (shameless plug) you can use my extension :)

I used to use firefox all the time, but found that Safari was considerably faster (on Mac), and FF used to freeze on this site - anything over 200 comments would choke it.

The new version (FF3) is much better.

Comment by milkcrate
2009-04-29 11:39:19

I always thot Safari looked like a Bazooka Joe Bubblegum wrapper when it launched. :)
I like Firefox. Those IE updates are memory hogs.

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Comment by VaBeyatch in Virginia Beach
2009-04-29 12:57:34

I have to switch to Safari or IE when comments hit around 320 or so…

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Comment by drumminj
2009-04-29 17:10:10

FF3 has appeared to fix this issue. I have no problems these days, though it’s scrolling performace is considerably worse than Safari.

Having a set of home “tabs” is kind of cool. The plugin architecture is great.

 
 
 
Comment by bluprint
2009-04-29 11:45:18

I switched to FF years ago. It had a memory leak the size of Texas. God forbid you should leave it on overnight…it would make the shower run slower.

I only use it now when I want to write/use a greasemonkey script. IE 7 has performed reasonably well.

 
 
 
Comment by Fed Up
2009-04-29 07:23:40

Asking prices really aren’t down very much from ‘05 & ‘06, only on forclosures. The sheep just can’t wait to line up to get sheared.

http://www.chicagotribune.com/business/chi-sun-housing-optimism-0426-apr26,0,3752998.story

Area real estate agents are making space in their cars for clients again and they get almost bubbly when they talk about the uptick in activity.

And finally, there’s the fact that life goes on. “I think people are realizing they have to move on with their lives and that’s what they’re doing,” said Vickie Linajs of Ryan Hill Realty in Naperville. “Things have really picked up and it’s not just me. A couple months ago, I was very scared.”

 
Comment by Professor Bear
2009-04-29 07:42:05

The US economy has officially endured the weakest six months since I took my first breath of air on planet earth.

How do the 19.1m vacant homes across the US fit in with the “smaller stockpiles” story?

Economy in U.S. Shrank at 6.1% Rate in First Quarter (Update3)
By Bob Willis

April 29 (Bloomberg) — The U.S. economy plunged again in the first quarter, capping its worst performance in five decades, reflecting a record slump in inventories and further declines in housing.

Gross domestic product dropped at a 6.1 percent annual pace, more than forecast, after contracting at a 6.3 percent rate in the last three months of 2008, the Commerce Department said today in Washington. The report, which marked the weakest six months since 1957-58, comes as Federal Reserve policy makers meet for a second day.

Smaller stockpiles may set the stage for a return to growth in the second half of the year amid signs Fed efforts to reduce borrowing costs and unclog lending are starting to pay off. The recession persisted even as lower gasoline prices and larger tax refunds helped bring an end to the worst slump in consumer spending in almost three decades.

“This is one of those good-bad numbers,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said in a Bloomberg Television interview. “Businesses are running about as lean as they possibly can be. It sets up the reality that any sort of increase in demand will cause firms to have to increase production.”

Comment by Professor Bear
2009-04-29 07:44:01

Luckily the all-knowing stock market had already priced in this “growth shocker”…

MarketWatch dot com
April 29 2009 10:42 A.M. ET

GDP plunges at 6.1% pace

Stock futures stay on bullish path following growth-data shocker
Record retreat in business investment cited for contraction in gross domestic product for first quarter. Consumers demonstrate a persuasive resilience.

Comment by Professor Bear
2009-04-29 07:45:45

The only green shoots I can see are due to the Fed’s liquidity flood pumping in to the stock market.

Comment by Professor Bear
2009-04-29 07:48:33

If you turn your attention over to Bloomberg’s exchange rate data, you will notice a few red shoots:

USD-CHF 1.1356 -0.0071 -0.6235% 10:38
USD-SEK 8.0710 -0.0811 -0.9948% 10:38
USD-DKK 5.6149 -0.0495 -0.8739% 10:38
USD-NOK 6.5712 -0.1050 -1.5735% 10:38
USD-CZK 20.1780 -0.1585 -0.7794% 10:38
USD-SKK 22.7170 -0.1968 -0.8589% 10:38
USD-PLN 3.3324 -0.0760 -2.2298% 10:38
USD-HUF 218.3250 -4.2000 -1.8874% 10:38
USD-RUB 33.1420 -0.2208 -0.6617% 10:38
USD-TRY 1.5975 -0.0162 -1.0008% 10:38
USD-ILS 4.2060 -0.0460 -1.0830% 10:35
USD-KES 78.6300 -0.3200 -0.4053% 10:05
USD-ZAR 8.5341 -0.1096 -1.2685% 10:38
USD-MAD 8.4106 -0.0602 -0.7107% 10:38

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Comment by Muir
2009-04-29 13:15:55

Yes, and combo knows this.

Cash (USD) may be a duke or Earl by Dec.

“The S&P500, benefited from a 2.93% decline in the U.S. dollar and increased 8.76%. The tide began to rise for most risk assets in March due to the announcement of quantitative easing by the Federal Reserve, some economic releases coming better than expectations and the introduction of the U.S. Government’s PPIP (Public-Private Investment Program).”

 
 
Comment by cougar91
2009-04-29 08:34:03

PB, how much do you want to bet the initial job claims number coming out tomorrow will be less than the previous weeks’ average? Another reason for the market to go up.

As someone who has some short-term short positions thus I don’t enjoy saying it, but Cramer and Kudlow wins this round, for the time being. We may argue all we want about more pain to come and second wave of foreclosures or what not but the PPT scores one big win for now.

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Comment by Jon
2009-04-29 10:15:57

They may be more, but certainly less than “analyst’s predictions”. Analysts. Why do we listen so much on people who focus on the anus anyway?

 
Comment by Muir
2009-04-29 13:22:58

USD-CLP 585.3750 -12.1250 -2.0293% 15:49
USD-COP 2292.1500 -37.0000 -1.5886% 16:08

YES!

The USD is DOWN against the Columbian Peso and Chile’s!

(to add to PB’s post)

Got commodities?

 
 
Comment by measton
2009-04-29 14:09:49

I still suspect that all of this pumping of the stock market is being done so that banks when they convert US gov preferred shares and possibly bonds that they give the tax payer and bond holders as little as possible. Once these conversions take place I suspect the stock market will fall again.

Any one with the inside scoop on when these conversions will take place?

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Comment by Professor Bear
2009-04-29 14:46:15

Someone is getting set up to be the banksters’ bagholder. If you are unsure who this somebody is, then watch your back!

 
 
 
 
Comment by Professor Bear
2009-04-29 07:52:02

No green shoots in sight just yet in the labor market…

Jobless rates rise in all US metro areas in March
By JEANNINE AVERSA – 24 minutes ago

WASHINGTON (AP) — Unemployment rates rose in all of the nation’s largest metropolitan areas in March, with Indiana’s Elkhart-Goshen once again logging the biggest gain.

Comment by DinOR
2009-04-29 08:14:46

PB,

Hoosiers feel free to chime in but… I believe Elkhart is home to several major RV and trailer mfrs. so that ‘would’ make sense?

Comment by Professor Bear
2009-04-29 09:28:05

I would think the trailer manufacturing business would be booming about now…

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Comment by ET-Chicago
2009-04-29 12:15:57

You are correct, DinOR, the region is RV central.

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Comment by Blue Skye
2009-04-29 09:03:30

“It sets up the reality that any sort of increase in demand will cause firms to have to increase production”

HAHA!

Nearly every customer of mine is living off the backlog with new orders practically non existent. The pantry shelves are getting bare.

It will take a massive and immediate increase in demand just to prevent severe layoffs and closings over the next six months at these manufacturers.

 
Comment by Professor Bear
2009-04-29 13:11:23

The sidebar to this article shows the ten US cities with the highest unemployment rates, on the range from 15 to 25 percent. Besides Bend, Oregon and Elkhart, Indiana, the other eight are in central California. If national unemployment rates don’t exceed 10 percent by the end of this year, I will eat my hat.

CNN Money
Special Report Your Job
Unemployment: 109 cities at 10% or higher
Government survey shows jobless rate grows in all 372 metro areas, with 15% joblessness in 18 of them.

NEW YORK (CNNMoney.com) — Unemployment rates in 109 metropolitan areas reached 10% or higher in March, almost eight times more than a year earlier, according to a government report released Wednesday.

Just 14 cities reported jobless rates of at least 10% last year, the Labor Department said.

The March 2009 report said unemployment rates in all of the nation’s 372 metropolitan areas rose in March compared with the same month in the prior year.

Jobless rates of at least 15% were reported in March in 18 areas, compared with only one - El Centro, Calif. - the previous year.

 
Comment by ecofeco
2009-04-29 16:41:23

“This is one of those good-bad numbers,”

Double plus good?

 
 
Comment by Hwy50ina49Dodge
2009-04-29 07:56:59

A true American past time: ML Sports & debt… ;-)

I know it’s early in the season…but I can’t resist: ;-)

New York Yankees 10 10 .500 4.0 4-2 6-8 3-6 5-4 2-0 Won 1 5-5

Financing :-)

“Rather than the $800 million value affixed to the stadium (which is for the stadium and not for the parking garages, highway improvements and other items associated with the construction), independent analysts have set the tab for the complete project closer to $1.3 billion. The city’s share includes allowing the Yankees to occupy 22 acres (89,000 m2) of Macombs Dam Park and John Mullaly Park (which is already used for stadium parking on game days), and to build parking garages on those parks.”

(Joni Mitchell’s comment: )
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!!

“City-funded artificial surface will be placed on top of those parking garages to make up for the lost parkland.”

“The city would retain ownership of the land, but would not charge the Yankees rent or property taxes. In addition, the city would foot the bill for acquiring scattered parcels of land near the waterfront, about a half-mile away, and building smaller parks as replacements there. The cost of renovating the existing parkland would be about $25 million; building new parkland will cost $150 million. That cost includes demolition costs for the historic Yankee Stadium, which would be completely torn down. The building’s destruction would be paid for entirely by the city and replaced with parkland. The city will also issue tax-exempt bonds for the Yankees’ new stadium. The Yankees would repay those bonds with payments in lieu of taxes; the Yankees have not paid taxes.
The Yankees have arranged for the lease on Yankee Stadium to be classified as an “operating lease”, even though many accountants think that the Yankees’ early involvement in the building of the stadium should have precluded operating lease accounting. This is extremely important to the financing because it means that the Yankees will be able to keep significantly more revenue from the stadium and will not have to share it with the rest of Major League Baseball.
New York state taxpayers will pay $70 million to help the Yankees build parking garages (as authorized by the State Legislature). The parking garage project would cost $320 million. City and State taxpayers will forgo up to $7.5 million annually in lost taxes resulting from the sale of $225 million in tax-exempt bonds authorized on October 9, 2007, by the New York City Industrial Development Agency (administered by the New York City Economic Development Corporation) to finance construction and renovation of the parking garages.[14][15] However, if the parking revenues are not enough to pay a reported $3.2 million land lease to the City of New York, the entity that will operate the parking garages and collect revenue will be able to defer that payment.[16] State taxpayers, through money that has accumulated from the MTA’s budget since the 1980s, will also pay all of the costs of a train station on the Metro-North commuter railroad.
In addition to the public subsidies and billions of dollars of increased revenue, the Yankees will benefit from a change to Major League Baseball’s 2002 collective bargaining agreement (CBA) that deducts new-stadium building costs from a team’s net local revenue, which in turn reduces a team’s revenue-sharing payments. For the Yankees, the largest contributor to the revenue sharing pool with roughly $300 million in overall revenues, this rule means 40 percent of their share of the price tag may be borne by the remaining 29 baseball teams. All told, the Yankees and the taxpayers can each expect to pay about $450 million, and the Yankees will cover the remaining costs from diverting revenue sharing payments that would have been paid to the other baseball teams.”

Yankee Stadium…From Wikipedia, the free encyclopedia

Comment by ET-Chicago
2009-04-29 08:37:23

Hey, you can’t put a pricetag on a .500 record with an overpaid roster.

Especially if you’re a NY taxpayer helping to underwrite all the infrastructure improvements and tax write-offs.

 
 
Comment by Muggy
2009-04-29 08:13:58

My buddy in NYC left his apt. to move into a house he inherited. He just got a bill from his former LL for $20k for back rent.

Is he screwed?

Comment by cougar91
2009-04-29 08:30:51

What does the lease contract says?

 
Comment by ET-Chicago
2009-04-29 08:31:43

Well, why did he get a bill for $20K in back rent?

Did he just leave in the dead of night?

Comment by Muggy
2009-04-29 08:43:56

He just gave me more details. He explained to his LLs that he would keep paying until they rented it out. That was month 5 out of 24.

His issue is whether or not they actually tried to rent it out.

Comment by Skip
2009-04-29 08:51:43

Break a deal - face the wheel!

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Comment by bluprint
2009-04-29 09:45:33

lol

 
 
Comment by ET-Chicago
2009-04-29 09:08:19

Did he get himself released from the lease or not?

If not, he should read over the lease carefully. He may have an out either in the lease or in NYC tenant laws.

(I assume he made an oral agreement, too, and didn’t put his offer in writing?)

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Comment by Muggy
2009-04-29 09:44:40

No clue, we have several lawyer friends in our circle, including 2 in NYC, so they’re on it. I’ll get the whole story when all is said and done…

 
Comment by Zombie Banks
2009-04-29 10:09:02

That story has me running for cover.
I hope that landlord fries in his own grease fat.

 
Comment by whyoung
2009-04-29 10:15:04

last fall I had a co-worker - who was quitting and leaving the country - who had a similar situation with her landlord in the West Village.

LL would not break the lease as he didn’t think he could re-rent at the same price. She had to find some one to sublet or take over the lease or pay the remaining months on the lease. It was a free market apartment, but not at the really high end price-wise.

In 26 years in NYC I’d never heard of anything like this!

 
Comment by ET-Chicago
2009-04-29 11:23:19

No clue, we have several lawyer friends in our circle, including 2 in NYC, so they’re on it. I’ll get the whole story when all is said and done…

Well, that’s promising.

In my experience, landlords will backtrack in the face of a credible legal threat, in part because laws and judges in rental-heavy areas (big cities, college towns) tend to favor tenants over landlords.

(File under: yet another reason to think three times before becoming a landlord.)

 
Comment by Faster Pussycat, Sell Sell
2009-04-29 11:34:59

So just quit and leave the country. The landlord will figure it out eventually when payments stop coming in.

 
Comment by Anonymous Coward
2009-04-29 12:14:17

I should add that if your friend never notified the landlord in writing that they were breaking the lease, I think they could be on the hook for the full amount. Basically, the landlord could claim the lease was still in effect and they had no right to re-let the property.

 
 
Comment by VaBeyatch in Virginia Beach
2009-04-29 13:05:49

Dude no way, he should have worked himself to find a replacement. A few good pictures and craigslist are all it takes.

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Comment by Anonymous Coward
2009-04-29 12:09:50

I am not a lawyer, but this is what I remember from the law classes I have taken: Landlords have to try to mitigate their loss by renting it out to another tenant. If the landlord had the opportunity to rent it out (i.e., knew that it was empty and available to let), and still did nothing about it, the landlord will not get the full amount from your friend. If it was a situation where there was not other tenant to be found, anywhere at any price, your friend would be on the hook for the full amount. This is extremely unlikely to have been the case in NYC. If the landlord could have rented it at a slightly lower market rent, your friend is only on the hook for the difference between the rent they agreed to on the lease and the lower market rent, for however many months left on your friend’s lease.

If the landlord was just lazy and didn’t try to rent it out, the landlord is screwed. If the landlord let it sit empty while he waited for an unreasonable wishing price instead of accepting market rent, the landlord is screwed. Your friend will probably come out okay but might owe something since rents have gone down a little.

 
 
Comment by cougar91
2009-04-29 08:19:43

Good time to buy a garage or start a computer repair business?

APRIL 29, 2009
In Glum Times, Repair Shops Hum

By GARY FIELDS, WSJ

The red 2002 Ford Thunderbird convertible sits in the back of the Wiygul Automotive Clinic in Alexandria, Va., as Kevin Coppedge works under the hood. It needs $3,363.99 of repairs — more than one-third of its trade-in value.

In good times, owner Suzie Clayton probably would have sold the T-bird or traded it in for something new. “My husband talked about buying a new car,” says Ms. Clayton, a co-owner of Dalton Brody Ltd., a high-end gift shop in Washington, D.C. “But I asked, did we really want the monthly payments for a new car? I own a business, and it’s a little scary right now to spend a large amount of money on anything.”

Economic fears are driving a resurgence for repairmen. When it comes to autos, computers and all kinds of appliances, consumers are more likely to repair what they have, rather than buying a new replacement.

At Daniel Hand’s Computer Medics of Northern Virginia in Fredericksburg, work orders are stacked up on his desk. Two years ago, the repair estimates would have scared off his customers. “When people used to come around, if the cost was $300 to fix it and a new one was only $500 or $600, they’d typically get a new one,” says Mr. Hand. Now, he says, “nine out of 10 times they come back and say, ‘Fix it.’ ” His business’s revenue is running about 30% higher now than a year ago.

Comment by In Colorado
2009-04-29 11:24:28

When a PC breaks I would say that 99 times out of 100 the hard drive crashed. Not too hard to replace. The real problem is restoring data that was not backed up!

 
 
Comment by drumminj
2009-04-29 08:25:17

Okay, last time to shill for my work…for now :)

HBB Firefox Extension v1.0 (woohoo!!!)

It does all these wonderful things:

* lets you see how many new comments there are on a post since your last visit on the main page (see here: http://www.pbase.com/drumminj/image/111777515)

* hilights new posts so they stand out among all the others (see here: http://www.pbase.com/drumminj/image/111777710)

* Adds a toolbar at the bottom of the page to help navigate to the next new post

* And the kicker: It will validate the HTML in your post and stop you from posting a comment with an un-closed bold or italics tag!!!!

Email me if you’d like a copy…I give up on hosting on mozilla.org. Requires Firefox 3.0+. I have I think 10 other people using it now…

drumminj/yahoo.com

Comment by ET-Chicago
2009-04-29 11:51:07

And the kicker: It will validate the HTML in your post and stop you from posting a comment with an un-closed bold or italics tag!!!!

Hey, that’s a nice addition! It’s embarrassing to miss a close tag.

I look forward to checking out the release version.

Hope you will post a tip bucket for your hard work.

Comment by drumminj
2009-04-29 17:11:56

Nah..it gives me something to put on my resume (helps me explain the gap in employment) and keeps my skills sharp. That’s good enough (for now :)

 
 
 
Comment by ET-Chicago
2009-04-29 08:28:53

Say it ain’t so, Joe! Who wouldn’t pay $2500 to see the Yanks in person? What happened to the “Own The Greatness” campaign aimed at big-spenders?

Yankees Slash the Price of Top Tickets
By RICHARD SANDOMIR, New York Times
April 28, 2009

Twelve days after opening their new stadium, the Yankees on Tuesday bowed to the sour economy and the specter of empty seats by slashing in half some of their top-end, $2,500-a-game prices.

Going further, the team also announced it will provide significant numbers of complimentary seats to existing season-ticket holders in premium sections, including some of the critical, and very visible, real estate behind home plate.

Over all, the new policy represents a dramatic retreat from the team’s initial luxury-sales strategy for the new stadium, which was underlined in advertisements that crowed “Own the Greatness” and “Select the Greatest Seats in the World.”

Comment by Hwy50ina49Dodge
2009-04-29 09:36:09

:-)

5 years ago I went to a Laker’s / Clippers pre-season game…I guess David Stern & “The League” collectively decided ALL MBA fans really truly love to hear rap music with violent language at 139 decibels while paying $7.00 for a 12 oz Coors Light…at least Mr. Cole got to personally meet Kareem Abdul-Jabbar at a book signing…

Holds NBA career record for: (an STILL a great role model!)

* Most points - 38,387
* Most minutes played (57,446)
* Most field goals made (15,837)
* Most field goals attempted (28,307)
* Most All-Star selections (19)
* Most All-Star games played (18)

(Hwy begins muttering…”Dang that Kevin Love…”) ;-)

 
 
Comment by pressboardbox
2009-04-29 08:29:22

My realtor just told me this is the best buying opportunity in the last ten million years. Sorry, that was Larry Kudlow…

Comment by Hwy50ina49Dodge
2009-04-29 09:55:53

“Sorry, that was Larry Kudlow…” ;-)

I’m compiling a “short list” of people who seem to have the keen ability to convince “others” in the “Truth” of their own “special” knowledge…by relentlessly & voraciously increasing their voice level, so that by continuously YELLING their POV becomes a normal Modus Operandi :-)

Rash Limpbaughs
Kukulow & Cramass
Dawn insHannity
“Jeff the Breck” girl
Fox news
Murdock “The American”
MSNBC

Comment by KJ
2009-04-29 16:35:10

And Keith Olbermann, Jeanine Garafalo, Ed Shulttz and Rachel Madcow are truth tellers.

 
 
 
Comment by Muggy
2009-04-29 08:51:20

Just called by VISA, unauthorized purchases on my card. I’ve lost track of how many times this has happened since I moved to FL. I think it’s 3 of 4. New card on the way…

Comment by Mikey(2)
2009-04-29 12:21:57

Wife’s credit cards swiped from her wallet in her purse underneath her seat in the movie theater last week. The theater was almost empty, yet these 3 lovely ladies decided to sit (and leave 10 minutes after the previews started) almost directly behind my wife and kids. They were nice enough to take the time to take just the cards and the cash. They made three identical $300+ purchases during the movie at a local grocery store that also sells some electronics items. I’d like to think that they bought groceries….

Comment by takingbets
2009-04-29 17:47:04

My daughters purse was swiped from her desk at work this week. She noticed it was missing about 2 hours after she last saw it. The thief went to a jewelry store and tried to use her credit cards after she had reported them stolen. The credit card company said they were going to file a police report so hopefully they might catch the crooks. Thing are getting bad around this town.

 
 
 
Comment by wmbz
2009-04-29 08:59:36

Hoffman: No bottom for home prices until next spring…

“Time and money is on your side,” if you’re interested in buying a home, says PNC Financial’s chief economist Stuart Hoffman, who thinks home prices will continue to slide until at least next spring. The S&P’s Case-Shiller index found the pace of price declines decelerating in February, and Hoffman thinks that slowdown will continue. “Maybe they’ll be declining 5 or 10% on average, not nearly 20% as the year goes on.” That still makes it a buyer’s market, says Hoffman, but for sellers: “If you wait a year from now to sell your house, more than likely you’re going to get less for it than you got today.”

Comment by Professor Bear
2009-04-29 12:51:37

10 percent of $200,000 is $20,000, and if you add in 6 percent in transaction costs thrown down the REIC rat hole, you are talking about $32,000, which sounds to me like a pretty steep admission price to membership in the Ownership Society.

Comment by Professor Bear
2009-04-29 12:54:27

Of course, I am not factoring in PITI — just home equity loss plus real estate transaction costs — into my illustration. If you compare PITI (plus, potentially, HOA, Mello-Roos, etc) to local rents, the argument in favor of owning may look worse. And the illustration I gave applies only to places where homes can be purchased for $200,000; most of the coastal bubble zones, where homes still cost more than $200K and price declines in excess of 10 percent are still conceivable, do not fit my example.

 
Comment by Kim
2009-04-29 15:37:40

Where are you getting 6% in transaction costs. Have closing fees really gone up THAT much? I’m just curious. I always figured 2-3% of contract price.

I know that the buyer brings all the money to the table, and is really the one paying the agents, but that should already be accounted for in the contract price.

With all that said, DH and I just renewed our lease. We’re figuring houses will easily go down more in the next year than the $20K-ish we’ll be paying in rent in that time.

Comment by Professor Bear
2009-04-29 18:42:23

“We’re figuring houses will easily go down more in the next year than the $20K-ish we’ll be paying in rent in that time.”

I thought 6 percent was the industry standard; sorry if I am off on the figure. Anyways, I am thinking along the same lines as you regarding rent. In fact, I think San Diego prices will drop another 20 percent, at least. On a $400,000 home, that amounts to $80,000 — three year’s worth of free rent for us (measured in terms of the current opportunity cost of catching a falling knife)!

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Comment by jeff saturday
2009-04-29 09:01:36

100 people die in the United States every day from regular old flu.
But the headline reads

First US swine flu death; school closings possible April 29, 2009 11:29 AM ET

All Associated Press newsWASHINGTON (AP) - A Mexican toddler in Texas became the first confirmed swine flu death outside of Mexico as authorities around the world struggled to contain a growing global health menace that also spread to Germany and Austria.

Giving an update on the crisis that has dominated public officials’ time and caused universal anxiety, President Barack Obama said, “Every American should know that the federal government is prepared to do whatever is necessary to control this virus.”

Comment by jeff saturday
2009-04-29 09:18:02

Uh Oh
I just sneezed, and it sounded like a squeal.

 
Comment by sleepless_near_seattle
2009-04-29 10:52:35

How can you be prepared if you don’t know what is necessary?

 
Comment by In Colorado
2009-04-29 11:19:24

100 people die in the United States every day from regular old flu.

True, but they tend to be the elderly. The swine flu is packing the threat to take down those in the prime of health.

 
Comment by Professor Bear
2009-04-29 12:48:02

Seven, seventy, what’s the real number, folks?

SWINE FLU: MEXICO CHANGES DEATH TOLL, 7 DEAD

(AGI) Mexico City, 28 Apr.

Seven have died due to the swine flu virus in Mexico. The local authorities have drastically changed the number of victims of the virus reported until now, which was previously set at 20.

Comment by In Colorado
2009-04-29 14:25:29

…if you think our gov’ts numbers are bogus……

 
Comment by cactus
2009-04-29 15:20:08

well its the panic that counts takes your mind off bad banks and crashing RE prices.

I’ll be checking out N san diego this friday after job interview.
Unless they cancel all flights due to flu

 
 
Comment by Blue Skye
2009-04-29 15:57:35

We are so easily manipulated. Wasn’t there a Treasury/bank scandal brewing just as this flu story morphed the headlines?

 
 
Comment by 20910
2009-04-29 09:10:06

I guess PNC Financial’s chief economist Stuart Hoffman didn’t get the memo from the “experts”.

According to a screaming headline on MSNBC, Prices Aren’t Expected to Get Much Lower.

The lede: “While housing prices are continuing to fall, prospective home buyers shouldn’t wait any longer for the market to hit bottom, experts say.”

Hmm, experts, you say, like . . .

“Most of the big declines in home prices have occurred,” says Lawrence Yun, the chief economist at the National Association of Realtors. “Any more will probably be minimal.”

Oh, OK. The guy who got it wrong consistently, repeatedly, for years, is still the media’s #1 go-to “expert.”

But wait! There’s another expert! Robert Abbott, a REALTOR in NJ says:

“Home prices are where they should be.”

Shocking. A real estate agent thinks prices shouldn’t go lower.

As for Jim Gillespie, CEO of Coldwell Banker, he’s “not just saying this because I’m in real estate, but I think it’s as great a time to buy as I have seen in my 34 years in the business.”

Umm, OK. As my sig other once pointed out, the media would never dream of quoting auto CEOs and car salesmen as “experts” on whether it’s a good time to buy an SUV, or maybe a De Beers exec or the saleslady at Tiffany as to whether $10K is a good price for an engagement ring.

Shameful.

 
Comment by whino
2009-04-29 09:16:53

Too many losses? This dosent sound like good news.

Berkshire won’t release earnings report this week

OMAHA, Neb. (AP) — Warren Buffett’s Berkshire Hathaway Inc. will not release its first-quarter earnings report this week on the eve of its annual meeting.

In each of the past three years, the Omaha-based company released its quarterly report on the Friday before its shareholder meeting.

This Saturday, the company expects more than 35,000 people to attend the annual meeting to listen to Buffett and Vice Chairman Charlie Munger answer questions for more than five hours.

But Berkshire spokeswoman Carrie Kizer said Wednesday the company’s earnings report won’t be released this week. Kizer says the release date has not been set.

 
Comment by whino
2009-04-29 09:20:59

House panel votes to outlaw ‘liar loans’

WASHINGTON (AP) — A House panel advanced legislation Wednesday that would outlaw the kind of “liar loans” and other questionable bank practices that helped drag down the economy.

The proposal, by North Carolina Democratic Reps. Melvin Watt and Brad Miller, is one of several that Democrats are pushing to tighten financial regulations on an industry that underwrote risky loans and passed off the bad debt to investors.

While Democrats cast the bill as a necessary measure that could have helped prevent the financial meltdown, the banking industry and Republicans warned that the would-be rules could restrict the flow of credit.

“Now is not the time to limit choices, raise costs, disrupt the secondary mortgage market, and look the other way on fundamental … reform” of government-created financial services corporations, said Rep. Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee.

http://finance.yahoo.com/news/House-panel-votes-to-outlaw-apf-15070365.html?.v=1

Comment by packman
2009-04-29 11:22:40

Yet again - rather than focusing on the fraud itself, the easy road of blanket dismissal is chosen.

While Liar Loans were certainly abused - won’t outlawing them make it virtually impossible for people on commission-based income - e.g… realtors… to buy homes going forward?

Another nail in the coffin of the housing market.

Comment by Prime_Is_Contained
2009-04-29 19:40:38

No. The self-employed and those with commission-based incomes were able to get loans long before “liar loans” came into vogue. They simply had to attach their last 3 tax returns as income-verification.

 
 
 
Comment by SUGUY
2009-04-29 09:28:29

What are your thoughts? Will the Obama administration succeed in these matters?

Can the market for securitized products be restored?

Will global capital park itself in the United States?

Will finance be half of our economy?

Will Obama’s policy to focus on growing the pie and make sure everybody has opportunity in that system succeeds.

Will we have a universal heath care system during Obama’s presidency?

Comment by Al
2009-04-29 12:14:37

no

no

maybe

no (whatever happened to finance supporting an economy instead of being it)

too funny

maybe

 
 
Comment by sfbubblebuyer
2009-04-29 10:03:42

This is interesting :

I live in ‘the avenues’ in Menlo Park. It’s unincorporated, and kids go to crappy redwood city schools then Menlo Atherton High. It’s a nice, middle-class type neighborhood where houses had been selling for 800kish back at the peak.

Today I saw my first house listing in the area break 500k, on the way down.

http://tinyurl.com/cxqc45

With a 5% loan, you’re getting CLOSE to having PI = rent. Not yet where it’s worth buying, but so much better than the 800k it would have fetched 2 years ago.

First I watched houses on the other side of the freeway collapse (east menlo park, a whole different hood. Emphasis on hood.)

Then I watched houses on the other side of the railroad track slide down (the bad side of our neighborhood, but not our neighborhood)

Now we’re seeing the slide hit in our neighborhood! HOORAY!

I’m sure it will sell for over asking since it’s the first to break the 500k barrier, but it’s an indication that price rot is creeping further into the ‘fortress’ areas.

 
Comment by Suffolk_Them
2009-04-29 10:30:35

From NY Newsday today:

Should the Obamas buy in the Hamptons?

Writer Michael Henry Adams thinks so. In his blogging column for The Huffington Post, he writes, “As they’re known to be looking for a place to vacation this summer, I’m recommending that the Obamas check out the Hamptons.”

Adams, whose books include “Style and Grace: African Americans at Home” (Bulfinch, $19.95), cites the area’s ethnic diversity, natural beauty, party scene, great restaurants and golf and tennis clubs among its draws.

But the local economy is why Adams, an Obama supporter, says the first family should be here. “These days, there are dozens of … houses in the Hamptons that they could easily choose from,” he writes. “And this would be a way that the Obamas would help the Hamptons. Their arrival would be sure to spur interest enough in real estate to undo all the unfortunate effects of the depression.”

- VALERIE KELLOGG

 
Comment by whino
2009-04-29 10:48:46

Financial groups reject Obama’s plan to provide homeowners mortgage relief through bankruptcy

WASHINGTON (AP) — A dozen financial groups, including the U.S. Chamber of Commerce and American Bankers Association, on Wednesday urged every member of the U.S. Senate to reject a key piece of President Barack Obama’s plan to keep tens of thousands of Americans from losing their homes.

“The housing market is already unstable and enacting cram-down legislation would make things worse by adding even more risk to the mortgage market, effectively undermining efforts by Congress and the administration to stabilize housing,” the bankers wrote in a letter sent to each senator.

Democratic leaders said they wanted to hold the vote anyway to put Republicans on record for turning their backs on Americans facing foreclosure.

The bankruptcy provision will be offered as an amendment to legislation aimed at freeing capital for banks by increasing the borrowing authority of the Federal Deposit Insurance Corp.

http://finance.yahoo.com/news/Banks-urge-Senate-to-reject-apf-15071734.html?.v=1

Comment by Professor Bear
2009-04-29 11:16:20

“Democratic leaders said they wanted to hold the vote anyway to put Republicans on record for turning their backs on Americans facing foreclosure.”

That’s what national housing policy gets down to: Figuring out a way to enact legislation that makes your rival party look bad.

Comment by 20910
2009-04-29 12:46:12

That’s what ALL congressional votes boil down to — political theatre.

Comment by ecofeco
2009-04-29 17:04:43

Exactly.

If anything constructive is actually accomplished it is by sheer accident and usually considered a mistake by the politicians.

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Comment by packman
2009-04-29 11:16:05

10-year T-bills back up above 30 - where they were before the 3/18 announcement of the Fed purchase of $300B, causing the yields to drop like a rock.

Expect to see this sawtooth effect for probably years. Yield increasing as buyers become more scarce, followed by an instant drop when the Fed buys more, followed by a ramp-up due to scarce buyers, etc. etc.

Eventually the Treasury will just say “why bother?” and just merge with the Federal Reserve, and print its own money to pay government expenses.

Comment by Faster Pussycat, Sell Sell
2009-04-29 11:21:21

Er … this is nothing more than the “prices are set at the margin”.

When the Fed comes in, due to the additional “demand” the prices rise (= yields fall.) Once they go away, the prices will fall back to what the market will bear.

This is classic Econ 101 in action, actually!

Comment by packman
2009-04-29 12:13:48

The Fed didn’t purchase all those in one day though - Mar. 18th was just the announcement. They’ve only purchased yet a small amount yet; it’s all being bought over a 6-month period. Since the demand is spread over that period the prices should remain high (and thus yields low) over that period, if other demand remained the same that is.

Rather than prices being driven by the Fed purchases though - my belief is that the opposite is true - the Fed is purchasing *because* prices were getting too low. They need to try and prop up the housing market by keeping interest rates low, and interest rates can’t stay low if treasury yields get too high. So as treasuries yields keep rising, the Fed will announce new purchases to keep the yields low. It’s their attempt to keep the housing market and probably the stock market propped up.

A layman’s view.

Comment by Muir
2009-04-29 13:44:03

+873.64

packman, by the way, not theoretical.

“The S&P GSCI increased 4.51% in March for its first monthly gain since June 2008. Benefiting from a 2.93% decline in the U.S. dollar index and coinciding with an 8.76% increase in the S&P 500 (TR), the March gain in the S&P GSCI reduced the Q1 loss to 10.64%, which is slightly ahead of the S&P 500
Q1 decline of 11.01%. The tide began to rise for most risk assets in March due to the announcement of quantitative easing by the Federal Reserve, some economic releases coming better than expectations and the introduction of the U.S. Government’s PPIP (Public-Private Investment Program).”

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Comment by FP
2009-04-29 11:59:02

After hearing Credit Card Issuers decreasing credit lines lately, I figure mine will be cut even though I charge quite a bit on it and pay most or all of it off at the end of the month.

Anyway, I got major increases on two of my Citi Cards this week. One went up another 50% (MasterCard) and the other was up 25% (Amex). These cards previously had at least 20K credit Limit. It’s scary to think if they gave huge credit increases to users that potentially can’t handle these kinds of huge balances.

Anyone out there recently had increases on their credit cards? Banks easing up again?

Comment by bluprint
2009-04-29 12:33:12

I suspect they are going to change models.

My impression of cc companies is that they used to be focused on transaction fees. The reason they charged high interest rates was as a deterrent, they really DID’T want to lend you money.

As time has gone by, that has changed. They joined in the “lend lots of money at high rates to people who can’t afford it” party as much as anyone. Now they see the hammer about to fall (plus they are probably having difficulty securitizing and offloading this junk). So it’s back to focusing on transaction fees, which will include increasing spending limits for people who pay their card off and who are generally lower risk.

That’s mostly just speculation.

 
 
Comment by wmbz
2009-04-29 12:28:14

Hear that giant sucking sound? LOL!

Perot Fund Turned Billions Into ‘Zero,’ Investor Says (Update1)
By Thom Weidlich

April 29 (Bloomberg) — The family trust of billionaire and former presidential candidate H. Ross Perot was accused in a lawsuit of mismanaging a fund open to outsiders so that it went from $2.5 billion to “less than zero.”

Southern Avenue Partners LP, which sued the Perot Family Trust and related entities, said Bermuda-based Parkcentral Global Hub Ltd. lost more than $3 billion while falsely claiming it was hedged against such losses. Southern Avenue wants to expand the suit to represent all the investors as a class.

“As a result of defendants’ breach of fiduciary duty, the global fund imploded,” Southern Avenue said in its complaint filed April 27 in federal court in Dallas. “The global fund’s net asset value went from over $2.5 billion to less than zero.”

JPMorgan Chase & Co., a trading partner of Parkcentral Global, sued the fund in November, saying it’s owed $753 million in collateral. Perot, 78, founder of Electronic Data Systems Corp., ran for president in 1992 and 1996. He isn’t named as a defendant in the complaint.

Eddie Reeves, a spokesman for the Perot family and its investment entities, didn’t have an immediate comment. He said in November that the fund was liquidating because it’s “no longer viable.”

The defendants misrepresented the risks of the fund to attract investors and collect more than $305 million in fees, Southern Avenue said in its complaint. They marketed the fund as “risk managed” rather than as a return fund, and exceeded its risk controls, Southern Avenue said.

‘Completely Obliterated’

“By late November 2008, the Global Fund was completely obliterated — its liabilities exceeded its assets — and plaintiff and the other members of the proposed class had lost 100 percent of their capital investment,” according to the complaint.

Steven Blasnik, president of Parkcentral Capital Management LP and manager of the Perot family’s money since 1992, and other defendants formed Parkcentral Global in 2002 with $56 million in cash, according to the complaint.

“Defendants marketed the Global fund as a once-in-a- lifetime opportunity to have access to the same money-management team (and proprietary trading techniques and strategies) used by the Perot family,” Southern Avenue said.

Comment by packman
2009-04-29 13:18:36

“Once-in-a-lifetime opportunity” = run - don’t walk - away

 
Comment by ecofeco
2009-04-29 17:11:43

Is this a great country or what?!

There is doubt that we HAVE to be the world leaders in fraud. :lol:

USA! USA! USA!

 
 
Comment by packman
2009-04-29 13:16:25

“Pace of downturn appears to be slowing - Fed hints worst may be past”

By that logic:

Sunday: Temperature 98.6 = “Healthy”
Monday: Temperature 99.5 = “May have an illness”
Tuesday: Temperature 101.0 = “Definitely sick, may be a nasty flu”
Wednesday: Temperature 103.0 = “Getting really bad - may be pneumonia”
Thursday: Temperature 105.0 = “Deathly ill - get this person to the emergency room!”
Friday: Temperature 106.0 = “Looks like the worst is past”

Comment by Professor Bear
2009-04-29 13:20:19

Saturday: Cause of death attributed to pig man flu.

Comment by packman
2009-04-29 14:07:08

LOL.

“Big man, Pig man… Ha ha charade, you are…”

(Pink Floyd - Animals)

Comment by Professor Bear
2009-04-29 14:43:02

Tap your big toe to 5/4 time and hum along while you read:

Money, get away
Get a good job with more pay and you’re okay
Money it’s a gas
Grab that cash with both hands and make a stash
New car, caviar, four star daydream,
Think I’ll buy me a football team

Money get back
I’m alright Jack keep your hands off my stack.
Money it’s a hit
Don’t give me that do goody good bullshit
I’m in the hi-fidelity first class travelling set
And I think I need a Lear jet

Money it’s a crime
Share it fairly but don’t take a slice of my pie
Money so they say
Is the root of all evil today
But if you ask for a rise it’s no surprise that they’re
giving none away

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Comment by Professor Bear
2009-04-29 13:18:46

While the Fed is busily scouring the domestic economic horizon for signs of green shoots, international lending is drying up.

Financial Times
Banks head back to their home markets
By John Plender
Published: April 29 2009 20:22 | Last updated: April 29 2009 20:22

adult snow geese migrate across the face of the moon

Asset migration: Americans repatriated $750bn in the last three quarters

The homing instinct is usually associated with the animal world. Yet at times of crisis the animal kingdom comes to the financial markets – witness events since the credit crunch erupted in August 2007. As greed gave way to fear, investors and bankers behaved like so many homing pigeons, inflicting a dramatic reversal on financial globalisation as they retreated to their domestic markets.

At the same time the recycling of the excess savings of current account surplus countries in Europe, the Middle East and Asia to finance the deficits of the high spending countries of the anglophone world is creating increasing tensions, with China initiating a debate on the creation of a super-sovereign reserve currency to replace the dollar. Against this background the future of financial globalisation looks more and more uncertain.

The extent to which the tide has turned is evident in Wednesday’s figures from the Bank for International Settlements, the central bankers’ bank, which show that cross-border lending by banks shrank by $4,800bn (€3,600bn, £3,200bn) to $31,000bn in the nine months to last December, the sharpest fall on record.

The chart below shows more broadly how cross-border flows in the 30 largest economies have seized up. The phenomenon is particularly striking in the US, where there was a $109bn exodus of foreign capital in the last three quarters of last year, against a $774bn inflow in the previous nine months. After the rescue of the Bear Stearns investment bank in March 2008, Americans’ homing instincts were even greater. They repatriated $750bn in the last three quarters, which helps explain the dollar’s unexpected strength during the crisis.

 
Comment by Olympiagal
2009-04-29 14:24:05

Dam*mit! Why can’t beer magically appear when I want some?
You know what, if IIIIIII was in charge of things, things would be very different.
*grumble *

Also, why can’t an axe appear, when I want one? See, another argument for placing me in charge of things.

Comment by packman
2009-04-29 14:32:29

Axe and ye shall receive.

Comment by Olympiagal
2009-04-29 15:09:14

Hahahahah! :)

Comment by Faster Pussycat, Sell Sell
2009-04-29 15:32:46

Axe not lest ye be axed.

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Comment by Olympiagal
2009-04-29 16:15:38

Not if I’m first with the axe.

 
Comment by Faster Pussycat, Sell Sell
2009-04-29 16:18:22

A1 axes B1
B2 axes A1

Like the velociraptor scene.

 
Comment by Olympiagal
2009-04-29 16:57:12

Like the velociraptor scene.

I don’t know what you mean. But I’m sure it’s devious, since you have it in your head.

 
 
 
 
Comment by bluprint
2009-04-29 16:01:44

Dam*mit! Why can’t beer magically appear when I want some?

Just do what I do, call yer wife. I called mine and I’ll (magically, no doubt) have beer. It’s not instant magic, takes about 30 mins or so, but it’ll happen sure as this storm movin’ in.

See, you just need a wife.

Comment by Olympiagal
2009-04-29 16:25:48

See, you just need a wife.

Your wife must not read this blog, is what IIIIII know, here.

Anyway, why does it take 30 minutes?
Oh, I know—prob’ly because your darling and pregnant wife has to heave her fetus-daughter-laden-down self up and then slowly waddle effortfully to the fridge to fetch a cold one to give to you, there where you sit shouting at the teevee in your stained overalls, fondling your rifle amidst yellowing ‘John Birch’ pamphlets.

Hahahaah! (Now, don’t be mad, I’m teasing here, bluprint. I wouldn’t tease you if I thought you couldn’t take it.)

See, you just need a wife.

Well, I been thinking the same exact thing, seeing as I’m done with men for forever.
…Oh my goodness! I just realized I’ve been done with men for forever for a whole week and a half! That’s a half a week longer than the last ‘done with men for forever’ event!’
I best mark this on the calendar.

Comment by Faster Pussycat, Sell Sell
2009-04-29 16:30:22

You also had nettles to distract you which didn’t happen the previous time!

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Comment by Olympiagal
2009-04-29 16:45:44

That is true. Both the ’stinging’ part and the ‘eating a giant’ amount of them part.

Say, what happens when you eat too many nettles?
Guess I’ll find out soon, seeing as how there’s half an acre left.

 
Comment by Olympiagal
2009-04-29 16:48:50

But you know what? I have seen no morels, yet. Last year I believe by this time I was all bragging how a bunch had popped up in my garden, where I spread fire-place ashes.
Maybe they’re spurning me…
Well, you know what? Scr*ew you, stupid morels! Is what I say!

(I’m feeling a tad high-strung at the moment. I mean, more than normal, even. Although I AM over wishing I had an axe handy, so that’s good.)

 
Comment by Olympiagal
2009-04-29 17:09:23

Say, what happens when you eat too many nettles?

No; really. Does anyone know?

 
Comment by Faster Pussycat, Sell Sell
2009-04-29 17:13:46

Stinging Nettle should not be consumed after it enters its flowering and seed setting stages, as the leaves develop gritty particles called “cystoliths” which can irritate the urinary tract.

I’d recommend moderation like all good things.

 
Comment by ecofeco
2009-04-29 17:18:00

Er, why the excitement over an axe?

Beer? Sure. Got that one. But an axe? (and I’m a normal tool lovin’ guy, but not NOT THAT much lovin’)

 
Comment by Olympiagal
2009-04-29 17:38:41

Er, why the excitement over an axe?

Oh, I was grouchy for a wee bit there, and thinking about some doing some creative and dynamic re-tooling of the first deserving subject I would have encountered, had I marched out the door with an axe. However….

*waves hand in a grandly dismissive sort of way *

… now I’m calmed down and allllll better, thanks for asking. :)

 
Comment by Olympiagal
2009-04-29 18:02:38

I’d recommend moderation like all good things.

Oh, yes—I’ve read about that ‘moderation’ thingie in the dictionary. I can’t say as I hold with the concept.

 
 
Comment by bluprint
2009-04-29 17:22:01

What’s FUNNY is…I just finished unloading my rifle before checking on this convesation. ;) (I’m packing to move, not fondling it or anything…although I did stop to do a LITTLE fondling)

And it normally takes my wife 20 mins to get home from work. 30 if she stops and gets me beer. :)

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Comment by Olympiagal
2009-04-29 20:48:04

*falls off wooden chair, carried away by wise giggles *

 
 
 
 
 
Comment by measton
2009-04-29 15:44:39

April 29 (Bloomberg) — Rotterdam, Europe’s largest port, may be running out of space to store crude as global oil demand posts its first back-to-back annual drop in a quarter-century.

The harbor is Europe’s largest refinery center and a trading hub for refined products such as gasoline and diesel. Some ships have been diverted or are waiting outside the port until space is available, said Jeroen Kortsmit, manager for commercial affairs at Royal Dirkzwager.

“A lot of tanks are fully loaded,” Kortsmit said by phone from Rotterdam April 27. He joined the company, which provides shipping information to terminal operators around the port, 24 years ago and said he has never seen storage this full before.

Question - my virus software has picked up a virus around the time I’ve visited this site, has anyone else had that problem. I’m not sure it is this site but it’s happened twice.

Comment by Professor Bear
2009-04-29 18:32:36

“April 29 (Bloomberg) — Rotterdam, Europe’s lar”gest port, may be running out of space to store crude as global oil demand posts its first back-to-back annual drop in a quarter-century.”

Bulls have been jawboning about shrinking inventories. Apparently their comments apply to neither US housing or oil. Got gluts?

Comment by jeff saturday
2009-04-29 18:46:42

Does anyone know if the U.S. Strategic oil reserve is topped off ? Or is the guy in charge of flying Air Force 1 over the buildings in Manhattan in charge of that too ?

 
Comment by Observer
2009-04-29 18:51:36

Obviously the oil inventories are building in anticipation of the imminent economic rebound when all those companies who have sold off their inventory have to replinish them to meet the demands of a resilent and soon to be surging consumer.

 
 
 
Comment by climber
2009-04-29 16:03:48

How do you go about getting a non recourse loan in a recourse state? I’m thinking about one of those 3.5% down FHA loans.

Where I live places that rent to people with dogs are few and far between and they charge extra (I don’t blame them one bit either).

 
Comment by measton
2009-04-29 19:11:12

What happens when the price of a good continues to go up despite an oversupply and collapsing demand?What happens to the person who buys an oil contract and can’t find a place to store it when he is supposed to take the supply? What happens to the oil?

What happens to stocks when their price goes up despite collapsing demand? When does reality hit?

It just seems that investing in this market is like playing russian roullete. At some point the bullet is going to come around.

 
Comment by measton
2009-04-29 21:27:26

Bloomberg

More Charge-Offs

In many cases, charge-offs have increased over the past year, even as loan-loss reserves have fallen as a percentage of non-performing assets. That has been the case at banks such as SunTrust Banks Inc., BB&T Corp. and Zions Bancorp.

At BB&T, for example, its loan-loss reserve of $1.1 billion was equal to 112 percent of non-performing assets at the end of the first quarter of 2008. Although that reserve had increased to almost $1.9 billion by the end of this year’s first quarter, it was equal to just 69 percent of non-performing assets.

At the same time, BB&T’s charge-offs rose to $388 million in the first quarter, compared with $125 million a year earlier.

Meanwhile, first-quarter increases in nonperforming assets at these and other banks more than outpaced moves to bolster reserves. Among the biggest banks, only JPMorgan bucked the trend, while Wells Fargo & Co.’s non-performing assets grew 40 percent in the first quarter and reserves increased 5 percent.

Growth Disparity

The disparity between the growth of non-performing assets and reserves was particularly pronounced at Regions Financial Corp. (35 percent versus 2 percent), US Bancorp (30 percent versus 13 percent), and People’s United Financial Inc. (51 percent versus 1 percent).

Scott Valentin, an analyst at Friedman Billings Ramsey Group Inc. in Arlington, Virginia, noted in a recent report that the “lower-than-expected” reserve build at Regions “belies the depth of the credit cycle.” He added that while Regions’ reserves are larger than some peers, “it is still inadequate, in our opinion, as it reflects a rearview mirror approach.”

Unfortunately, that is the driving technique too many banks have chosen over the past two years. If investors are lucky, stress-test regulators will force banks to get their eyes back on the road.

 
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